Rising energy bills are causing concern among most homeowners and their neighbours. But how exactly does the cost of your energy bills impact your resale value? Let’s find out.
Do Lower Energy Bills Add Value to a Property?
While lower energy bills won’t necessarily add value to a property, the EPC rating of your home will. The term ‘EPC’ means your Energy Performance Certificate, which rates your home from A to G in terms of its energy efficiency.
Your energy bills are influenced by your energy efficiency, but they’re mostly influenced by your usage. For example, if your heating stays on permanently and you use lots of electricity to power tumble dryers or hot tubs, your bills will be higher.
Buyers won’t be put off by high energy bills from current owners, but they may be influenced by how energy-efficient your home is. The higher your EPC rating, the more your property is worth – and the more desirable it is to modern buyers.
In fact, a UK study found that properties with an EPC rating of A or B sold for at least 14% more than their counterparts.
Do High Energy Bills Make a House Less Attractive?
Bills have always influenced buying decisions – as they rightly should. People generally don’t buy houses that cost more to run than they can afford.
However, in today’s market, energy bills, in particular, are on the rise, costing homeowners significantly more than they did just a few years ago. This can mean that your home’s EPC rating can influence your buying market more than ever.
In most buying markets, houses with lower ratings cost more to run, which can be unattractive to certain buyers. However, it all depends on your buyer.
Buyers searching for a fixer-upper home may not mind the low ratings, as they can increase energy efficiency during renovations. While recently refurbished homes with a low rating (D to G) may be more challenging to sell.
What is a Good EPC Rating?
The higher the EPC rating for your home, the better. In most cases, an EPC rating of D and above is typical and considered good.
How Much Value Can I Add By Improving an EPC Rating?
Improving your EPC rating can have a significant impact on how much your property is worth. Rightmove found the following improvements can add:
- From D to C: 3% or £11,157
- From E to C: 7% or £26,033
- From F to C: 15% or £55,786
These value increases are significant, which can make energy-saving improvements potentially worthwhile. However, it’s important to remember that making these changes can be costly, which may not make it cost-effective for your home.
Ready For a Valuation?
It’s true that most buyers today want an energy-efficient home to keep the running costs down. It’s also a fact that the better your EPC rating, the more your home is worth – regardless of its size.
Yet a property with a low EPC rating isn’t necessarily going to be difficult to sell or valued significantly under market value. So many other factors can influence how much your home is worth – not just its energy efficiency.
Get an instant online valuation to find out how much your home is worth, or find the best local estate agents in your area and book a valuation with an expert today.