Property giant Rightmove is urging lenders to invest in more innovative green mortgages in a bid to get all homes – particularly those rented privately – to improve their energy efficiency.
The latest edition of the portal’s Greener Homes Report says it welcomes the Labour government’s Warmer Homes plan proposing to invest £6.6 billion to upgrade homes with better insulation and low-carbon heating like heat pumps. But it says there are other measures the government should also consider:
- A package of support for home-owners and landlords across the mass market (properties under £400,000) to make green upgrades, through grants or low-interest, long-term loans:
- Allowing landlords to offset the costs of energy efficiency improvements against income tax in the year the costs are incurred rather than against capital gains tax when the property is sold;
- Introducing stamp duty rebates if a new buyer makes green improvements in the first few years of purchase. Rightmove suggested this change last year and still think it could be successful in helping motivate people to make changes;
- Encouraging mortgage lenders to continue investing in innovation in the green mortgages space, so that new products and awareness of them generates wider mass appeal.
Tim Bannister, Rightmove’s Director of Property Science, says: “It’s clear from our analysis that more needs to be done to help the mass market transition to greener homes, especially those living in homes worth under £400,000.
“In the rental market, through discussions with agents and our research, we know landlords want to provide comfortable, energy-efficient homes, but green upgrades can be costly. For landlords of lower-value properties, the financial returns may not always justify the investment.
“Now that the government has confirmed there will be a consultation on raising the minimum energy efficiency standards in rental homes, we look forward to seeing much needed clarity, and ideally support, for landlords, which in turn should benefit tenants over the medium to long term.”
The report also suggests that a green ’wealth divide’ is appearing. It says higher value property owners are making green upgrades at a much faster pace than those in the mass market.
Analysis of EPCs that were created over the past year found that 50% of £1m-plus properties had significantly improved their rating since their previous EPC. This compares with only 32% of properties worth under £400,000.
With 64% of properties listed for sale on Rightmove priced below £400,000, the trend shows that the mass market needs more help to make green upgrades.
With the recent energy price cap rise, household bills are expected to increase by 10% on average this winter, making energy-efficient homes ever more crucial as people strive to cut living costs.
Some 92% of renters say it is crucial to understand the energy efficiency of their home, compared to 87% of homeowners, showing the growing importance of increasing costs and energy bills in rental properties.
There is also a willingness from people to change their behaviour. The majority (72%) of people would be willing to change how and when they use energy if it meant they could access cheaper energy rates at different times of the day.
Rightmove says the difference in bills between homes with higher and lower energy efficiency ratings can be significant. The average energy bill for a three-bedroom semi-detached house with an EPC rating of F stands at £4,312 per year, compared with £1,681 for the same house with an EPC rating of C – a difference of £2,631.
Rightmove’s Greener Homes report is available now via the portal and includes a regional view of stock by EPC ratings and the improvements versus 2019;
improvements since 2019 of the annual CO2 emissions that homes produce; new build development progress and the latest innovations; and the most common green improvements that homeowners have made.
