More Green Incentives Needed To Help Home-Owners And Landlords

8th August 2023

More Green Incentives Needed To Help Home-Owners And Landlords

Are homes in the UK going greener and is enough being done to help people make changes?

Saving money on energy bills continues to be the biggest reason for people to make green improvements to their homes. In fact, our research show that 78% of home-owners say reducing energy bills would motivate them to make changes.

Higher energy bills have also contributed to one in five first-time buyers and one in five tenants saying a property’s energy efficiency will be a major factor when looking for their next home. But two in five landlords with one property say they’re more likely to sell up than make improvements.

At the moment, energy-saving improvements are expensive. For home-owners, there are not only the cost barriers to retrofitting, but also the challenge of working out which changes will have the biggest impact, and how to get started.

More significant incentives are needed for home-owners and landlords to improve energy efficiency and help them bring down running costs.

The second edition of the Rightmove Greener Homes Report, is out today and is an in-depth study that looks into the challenges and behaviours to creating more sustainable homes in the UK, and highlights just some of the cost-saving incentives that could be offered to help us to make our homes greener.

The greener homes challenge

The government has a target to get as many homes ‘as practicable’ up to an Energy Performance Certificate (EPC) rating of C by 2035. Our data shows that 60% of homes for sale on Rightmove – and 50% of homes available to rent – have an EPC rating of D or below.

Research shows that if EPC improvements carry on at the current rate, it would take 43 years for 100% of the houses that are currently for sale across Great Britain to reach an EPC rating of A-C, and 31 years for houses that are currently available to rent.

“It’s clear that the current incentives aren’t yet big enough to make people sit up and take notice, and even the incentives that do exist aren’t easy to find out about,” says Rightmove property expert Tim Bannister.

“The benefit of making green improvements can be seen in the overall premium that a seller can command. Of course, improvements that make a home more energy efficient could also mean the condition improves, such as installing new windows, and so owners will be weighing up the cost of improvements versus the return they can get when they come to sell. But the end result of making improvements is not just a refurbished home worth more money, it’s also a greener home.

“In order to shift the demand to greener homes, incentivisation and education is key. The ‘price of cosy’, or a better insulated home, is hard to quantify until people see how it can change how they live for the better, and they need to be able to afford it,” he adds.

What incentives could be offered to help reduce the cost of green improvements?

New measures would need to be carefully thought through, but the following areas could be considered:

  • Stamp duty rebates if a new buyer makes green improvements in the first few years of purchase
  • More significant incentives for both new mortgages and remortgages for energy-efficient homes 
  • More grants or tax benefits for green technology such as electric car charging points and solar panels
  • Enabling new innovations that speed up the creation and implementation of energy efficient technology

Tim says: “Adoption at scale will take time and there are clearly areas that need more attention than others. Houses are much more energy-inefficient than flats, and the sales market is lagging behind what we’re seeing in the rental market.”

One of the challenges is that there are not enough suppliers and equipment for the greenest option to be the most affordable option for home-owners and landlords.

“We need to wait and see what the government proposes or what green finance options become available. Affordability will remain a challenge unless the incentives are big enough,” says Tim.

“The days of building energy inefficient homes is already over, and we need to get to the point when running an energy inefficient home is a thing of the past. People need to know what to do, in what order, why they are doing it, and what benefits it will bring. Our analysis does show that our housing stock is going greener, but more needs to be done to speed it up,” he adds.