But costs remain as the primary barrier
More than a fifth of prospective homebuyers plan to make their homes more energy efficient in the hope of securing more favourable mortgage deals, according to new research from Mortgage Advice Bureau (MAB).
The research found that 81% of potential buyers, including first-time buyers, are planning to make energy efficiency improvements to their future homes for various reasons.
The primary reason, cited by 58% of buyers, is the desire to lower monthly utility bills, driven by the ongoing cost-of-living crisis and concerns about high energy costs. Additionally, 22% of prospective buyers hope that these changes could lead to more favourable mortgage deals.
Other motivations include enhancing the overall liveability of properties (36%) and making homes more desirable for future resale (32%).
The MAB research also found that there is a growing awareness of the environmental benefits of energy-efficient homes.
According to the study, 44% believe that improving energy efficiency is beneficial for the environment, up from 36% last year. This reflects a rising interest in properties that align with sustainable practices, including the potential for green mortgages that reward energy-efficient homes.
However, with high interest rates, the feasibility and affordability of such mortgages have become more challenging. For those not planning to make their homes more energy efficient, the primary barrier is cost, with 51% of these buyers stating that the changes are too expensive.
The cost of energy-efficient upgrades remains a significant obstacle for many buyers, especially with current high interest rates. MAB said it is crucial for the government and financial institutions to collaborate on solutions that support homeowners in making these changes while ensuring financial viability.
“The strong interest in energy efficiency upgrades highlights buyers’ willingness to retrofit their property, however, they must be supported and enabled to do this,” said Ben Thompson (pictured), deputy chief executive at Mortgage Advice Bureau. “The UK’s housing stock is some of the leakiest in Europe, and to be successful in the race to net zero, this will need to be tackled.
“This is something both the mortgage industry and the government will need to work on together. Enhancing the attractiveness of green mortgages through increasing the amount that can be borrowed, a lower rate or cashback for example, could be a powerful tool in helping to transition to a more sustainable and environmentally friendly housing sector.”
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