According to the latest data, energy bills will fall to £1,923 a year for the typical household starting from October.
This comes under the new price cap announced by Ofgem, in an attempt to ease cost-of-living pressures as homeowners head into the often costly winter months.
In light of this, Newspage asked brokers and property experts how important energy efficiency is for people when buying their homes.
Reaction:
Kirsty Wells, director at Blueprint Mortgages & Protection:
“I have not come across one borrower yet who has used a property’s energy rating as a factor when weighing up which property to purchase.”
Neezam Romjon, co-founder at Rebus Financial Services:
“I speak to a lot of first-time buyers and can’t recall a single conversation where the energy efficiency of a property was a primary concern.
“As always, location and price are the priorities.
“People understand that their energy costs are likely to be higher, but that is dwarfed by the rise in their mortgage payment if they buy somewhere more expensive that is more eco-friendly.”
Stephen Perkins, managing director at Yellow Brick Mortgages:
“There are multiple factors people take into account when considering a home, and many have big lists of must-haves and would-like-to-haves.
“I have never heard anyone mention EPC ratings or energy bills as part of either list.
“The only clients who have ever factored this in are buy-to-let investors looking D and above, or C and above ideally due to regulations.
“Energy costs are just one of many increased costs homeowners and first-time buyers need to contend with.”
Darryl Dhoffer, mortgage expert at The Mortgage Expert:
“For the homebuyers out there, only a select few I talk to are concerned about the EPC rating on a property and want to do their part for climate change.
“The majority are more concerned about price, location, and whether they can afford the mortgage.
“For landlords, you have different conversations altogether, as upcoming requirements for them will require properties to have an EPC rating of C or above by 2028, although I can see that can getting kicked down the road.”
Riz Malik, founder and director at R3 Mortgages:
“In over 20 years in financial services, no client has ever told me that energy efficiency was the reason they bought a property or played a part in their decision-making process.
“My clients care more about price, location, amenities and re-saleability.
“It’s a nice-to-have but it is not as important to most people as the government seems to think it is. Another example of being completely disconnected from the electorate.”
Lewis Shaw, owner and mortgage expert at Shaw Financial Services:
“No one buys a property based on energy efficiency, and nor should they.
“Of course, it may factor in a small way if choosing between properties that tick all your boxes.
“However, with energy bills reducing, this is now less of a concern than 12 months ago.”
Joe Stallard, director and adviser at House and Holiday Home Mortgages:
“Energy efficiency still isn’t a driver when it comes to people choosing property.
“It falls into the nice-to-have category. There’s been a lot of talk about green mortgages, but lenders need to do more if they want to drive real change.
“Minor cashback or subtle rate improvements just aren’t strong enough to make people put energy efficiency near the top of their property requirements.”
Scott Taylor-Barr, financial adviser at Barnsdale Financial Management:
“Currently, the energy efficiency of a home is not a part of most people’s’ buying criteria: it’s simply a bonus if the house they buy ends up being energy efficient.
“This is of course hugely different for landlords who now must meet minimum EPC standards and, potentially, this may be toughened up in the future for that sector.
“This does mean that the Government will at some point have to apply more pressure to improve the energy efficiency of the UK’s housing stock and how they do this will be the concern.
“For example, they could apply tougher rules on lenders creating a much greater interest rate penalty for those buying and owning poor performing homes, or they could amend the Stamp Duty system to align with the EPC results; so the more inefficient the property, the higher the Stamp Duty bill to buy it.”
Bob Singh, founder at Chess Mortgages:
“There is still a lot of ignorance around EPCs and their deeper meaning.
“Many buyers are quite happy to accept D- and E-rated stocks because they may have plans to upgrade the property anyway.
“The difference in bills between a good EPC and a bad EPC isn’t always appreciated. Lenders need to offer more green products with lower rates to incentivise borrowers to seek better rated properties.
“Buy-to-let buyers are certainly more aware and buy better stock not least due to the imminent changes in legislation to EPC ratings.
“More than ever, advisers need to have conversations about EPC ratings and make borrowers aware of what’s coming.
“If we are not careful, Local Authorities may start slapping a ULEZ-type tax on homes with bad ratings.”
