Does An Energy Efficient Home Make It More Valuable?

Its a question I get asked fairly frequently and to be honest I don’t have an answer. Sorry to disappoint you! There are however a number of reasons why a home should be more valuable and I hope to cover a few of these this week and you can make your own mind up.

Earlier this year I did some work with a range of local estate agents in Hampshire and Surrey  and undertook a simple study to determine what value they perceived in having renewable technology installed in a home and what affect it had on the sale price. Their answers shocked me.

It became clear that whilst the majority were aware of solar panels the value they placed (if any) on the property was simply the approximate value of the installed equipment. They quickly followed their comments up with either “we haven’t sold a house yet with a renewable heating system” or more generally “It’s just not something our customers are interested in.” Few also had any idea what a heat pump was (Tut, Tut, Tut!).

But let me pose this question to you…

“If you had two homes side by side that looked identical and one had net energy bills half of its neighbour, which would or should have the higher market value?”

OR

“If you had two homes side by side that looked identical and one had a fixed term tax free government subsidy payable for the next 7-20 years compared to that of its neighbour which has none. Which would or should have the higher market value?”

20 year tax free income

And that is exactly what a home that has integrated sustainable technology may be able to offer. Even better the previous owner has made the upfront capital investment and so the new home owner stands to benefit from the considerable fuel savings.

Few appreciate that a home with an average sized 12-panel solar installation will receive over £20,000 in combined electricity savings and tax free government subsidies over the next 20 years. And homes with heat pumps or biomass boilers could receive considerably more.

Even without subsidies a home with a correctly installed heat pump could see energy bills 40% lower than burning oil to heat the exact same building.

And whilst, I am not so naive as to think that there is a great deal of other emotional factors at play during the home purchasing process but from the seller’s point of view valuing the significant money generating and fuel bill saving asset in the home would be a welcome acknowledgement of the lasting benefits passed on with the home.

Great news for home buyers

Sadly, most estate agents that I spoke to admitted the value of the home could at best be raised by the value of the renewable energy capital equipment alone.

So for now the opportunity lays with the home purchaser as there is likely to be a hidden pot of gold “in them there sustainable homes”. Sadly, sellers may well have to wait for the market to catch up though.

Nonetheless the idea provides food for thought and it indeed one you should consider next time your boiler is on the blink or you are buying a home with sustainable technology already included!

Doug Johnson

Doug is a chartered mechanical engineer and has had the pleasure of being involved in the UK renewable sector since 2008. With wide-ranging operational and design experience in both the domestic and commercial sectors across a wide range of recognised technologies he hopes to be able to share his experience to help enlighten and save you hassle along the way.