The cost of living crisis and soaring energy bills mean many homeowners are looking at ways to make their property more energy-efficient. It could save you money on your bills, and there are other benefits too.

According to a report from think tank Institute for Government, homes in the UK are among the least efficient in Europe. It means households are likely to face far higher energy bills. 

The report suggests that more than half of UK properties are rated D or lower on their Energy Performance Certificate (EPC). A D rating suggests that a house is not well insulated, has a dated boiler, and has poor double glazing. In contrast, fewer than 5% are rated A or B on an EPC. 

So, it’s likely that there are steps you could take to improve your home’s energy efficiency. Here are three reasons to make it a priority. 

1. Save money on your energy bills

One of the most obvious benefits of making your home more energy-efficient is that it could reduce your energy bills. 

Energy efficiency has a direct effect on your budget – the Institute for Government report estimates that a home with an EPC rating of F will have an annual gas bill that is almost £1,000 higher than a similar property rated C.

With average gas and electric bills rising sharply in the last year, it’s not surprising that a Legal & General report found that 37% of homeowners are prioritising actions that will lead to cheaper bills. 

Taking steps to improve your home’s insulation can mean your heating doesn’t need to be on for as long to maintain a comfortable temperature. While these steps often mean paying out now, they will typically pay for themselves over the medium or long term.

If you’re not sure which measures will save you money, an EPC can help identify where your money will have the largest effect and the expected savings. 

You may also want to consider energy efficiency when upgrading appliances or lightbulbs to reduce your energy use.  

2. Buyers will pay a premium for energy-efficient homes

If you plan to sell your home in the future, investing in energy-efficient measures could attract buyers and boost the sale price.

The Legal & General study found that consumers now rate homes with energy-efficient, sustainable features as more important than the size of the property. And they’re willing to pay more for them.

Recognising the long-term value of energy-efficient homes, buyers said they were willing to pay a 10.5% premium. This rises to 20% among Generation Z, indicating that it’s a trend that will continue. 

Even if you’re not planning to sell your home, increasing your property’s value could reduce your outgoings. As your loan-to-value (LTV) ratio will fall because you hold more equity, you may be able to access a lower rate of interest when you remortgage. 

3. You could save money through a “green” mortgage

If your home is energy-efficient, you may be able to take out a “green” mortgage. They can offer a competitive rate of interest, so your repayments and total cost of borrowing could be lower. 

Each lender will have its own criteria; however, your home’s EPC rating will often need to be A or B to be eligible for a green mortgage. You will still need to meet the lender’s affordability criteria for your application to be successful. 

While growing in popularity, green mortgages are still rare and it’s important to understand if they’re right for you before applying. We can help you compare different mortgage options with your needs in mind. 

The government’s £1 billion scheme could improve your home’s energy efficiency

The government is set to launch a new scheme that could help you pay for the costs of improving your home.

The ECO+ scheme will provide much-needed support to households and help the government reach carbon emission goals, as around a fifth of the UK’s carbon emissions come from homes. 

The Department for Business, Energy, Industry, and Skills said households who currently don’t benefit from other government support would be able to upgrade their homes under the new £1 billion scheme. It’s due to launch in spring 2023.

While the government hasn’t released the full details yet, it’s aimed at homes with a low energy efficiency rating in lower Council Tax bands. It’s expected ECO+ will provide grants to pay for things like loft and cavity wall insulation.

Contact us to talk about your mortgage

If you want to discuss your mortgage options, please contact us. We may also be able to help increase your mortgage to cover energy efficiency measures you want to take. 

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.