Savills’ survey of 1,000 buyers and sellers found that for the majority (62%), recent interest rate rises and increased cost of living had not yet affected their budget for their next home. However, buyers are now looking to reduce their spending in other ways by placing more consideration on the potential running costs of their next home

The squeeze is being felt most keenly at the lower end of the housing market where a cut back on discretionary spending is much harder. Of those looking to purchase a property below £500,000, the vast majority (82%) of respondents said that energy consumption was now a more important consideration.

“With energy bills and inflation dominating news headlines, it’s no surprise prospective home buyers are beginning to think about more than just the price of their next property. Our previous buyer and seller survey in April also highlighted that the EPC rating of a property played an important part in decision making for more than two-thirds of respondents. And, six in ten buyers (59%) would be willing to pay more for a home if 75% of its energy came from renewable sources,” comments Frances McDonald, research analyst at Savills.

But when asked which energy efficient improvements had been considered over the past year, it is clear that barriers remain to implementing some of the most effective solutions. While a quarter of people had investigated the installation of solar panels, just 5% had actually  undertaken the work. Similarly, around a fifth had investigated air source heat pumps and ground source heat pumps, but only 4% and 2% respectively, had undertaken the works. 

“Buyers are beginning to think much more about energy-efficiency improvements, but easy fixes, such as low energy lighting or replacement boilers, are the most likely to have been either investigated or implemented, as the cost is more manageable, payback is more immediate and the technology well-established. And, although investigated by a higher proportion, few have so far made the more difficult and costly improvements, including air or ground source heat pumps and solar panels.

“Even with the energy price guarantee coming into effect, household bills are on the rise, and the payback period for improvements is decreasing quickly. But, as more and more importance is placed on our homes’ energy performance, it’s not just going to be about a long term saving on running costs but also future-proofing its value,” concludes Frances McDonald of Savills.

*Survey took place between 24th and 30th August 2022