Two thirds of homeowners want to make their properties greener: What does it cost?
Two thirds of homeowners would like to make energy efficient improvements to their properties, a study from Butterfield Mortgages has found.
Environmental concerns are the greatest driver of change with over half (54 per cent) of respondents saying their worries have led them to consider increasing the energy efficiency of their homes.
But the cost of carrying out improvements such as insulation, heat pumps and double glazing can be high.
Almost a fifth (17 per cent) of homeowners surveyed said they had considered remortgaging to fund energy-efficient upgrades – in the hope that it would then bring their energy bills down.
Motivation: Some 46% of homeowners have been driven to make efficiency changes in their homes as a result of spiralling energy costs
Since coming out of the pandemic demand for gas has gone through the roof, but supply has struggled to catch up. It has sent prices soaring and pushed up the cost of gas and electricity for both households and businesses.
This has been compounded by Russia’s invasion of Ukraine which has led to a squeeze on gas supplies across Europe.
However, despite the wholesale price of gas and electricity falling since December household bills are still high.
In the survey, 46 per cent said that the energy crisis and spiralling costs had led them to accelerate their home renovation plans. The figure rises to 65 per cent among people aged between 18 and 34 years old.
Other are motivated to improve the efficiency of their home in order to increase its future sale value, with 36 per cent saying they are making the changes in order to improve their home’s energy performance certificate rating.
Alpa Bhakta, chief executive of Butterfield Mortgages, said: ‘Homeowners are increasingly looking for ways to improve the energy efficiency of their properties, whether to reduce costs, improve future sale values, or contribute to a greener future.
‘We can expect millions of owners to invest in home improvements in the months and years to come – and some may be looking to re-finance their property in order to do so.
‘Our research also uncovered a significant knowledge gap among homeowners that needs addressing. Less than half are aware of what the EPC rating of their property is.
Lofty ambitions: Wall or loft insulation is a popular way to make a home more energy efficient
‘As sustainability considerations rise, homeowners and buyers alike will be turning to their brokers and lenders for guidance on EPC-related issues, particularly if legislation around residential properties is introduced in the future.
‘Those who are aware of this growing trend now have an opportunity to become well-versed in the issues ahead of time and can help advise clients appropriately.’
EPC is a rating scheme which bands properties between A and G, with an A rating being the most efficient and G the least efficient. The most common EPC rating for homes in the UK is a D.
Butterfield’s survey showed that just 40 per cent of homeowners know their property’s current EPC rating.
When asked what they had already done to make their homes greener, the most common improvements were installing LED light bulbs (66 per cent), investing in double or triple glazing (57 per cent), adding loft or wall insulation (55 per cent), and using a smart meter (46 per cent).
How much do energy efficient home improvements cost?
For those looking at adding efficiency improvements to your home, it is worth knowing the cost so you can decide what is best for your property.
Double glazing can save you up to £235 a year in energy bills, according to the Energy Saving Trust, keeping heat in and noise and drafts out. However, it comes with an big upfront cost. Fitting A-rated double glazing to the average semi-detached house costs around £7,500.
Keeping more heat in your home through wall or loft insulation is also a popular choice. Around 35 per cent of heat leaves buildings through the walls, according to insulation experts LoftZone.
There are two types of insulation, external and internal. External insulation involves fitting insulating material and then rendering or cladding over it. Internal insulation is mostly a form of thermal sheeting that is fitted to the inside walls. This will reduce room size when installed.
The cost of insulating the outside of a three-bedroom semi-detached home with solid wall insulation is around £12,000, or £8,500 if done inside, according to the Energy Saving Trust.
Double glazing reduces energy bills but comes with a significant upfront installation cost
However, that then leads to a big drop in energy bills – £240 a year for a mid-floor flat all the way up to £930 a year for a detached house.
Cavity wall insulation can save up to £1,800 a year but there can be serious issues if it is not properly installed.
Heat pumps are another way to improve your home’s green credentials. The work by gathering heat from either the air or ground and can replace traditional gas boilers and experts say they can cut up to 25 per cent off your energy bills as the devices require less power to run.
Air source heat pumps can cost between £8,000 and £14,000 to install, according to data from Uswitch.
Meanwhile, ground source heat pumps are generally pricier, with a system costing from £15,000 to £30,000.
What to do if you need a mortgage
Borrowers who need to find a mortgage because their current fixed rate deal is coming to an end, or because they have agreed a house purchase, should explore their options as soon as possible.
This is Money’s best mortgage rates calculator powered by L&C can show you deals that match your mortgage and property value
What if I need to remortgage?
Borrowers should compare rates and speak to a mortgage broker and be prepared to act to secure a rate.
Anyone with a fixed rate deal ending within the next six to nine months, should look into how much it would cost them to remortgage now – and consider locking into a new deal.
Most mortgage deals allow fees to be added the loan and they are then only charged when it is taken out. By doing this, borrowers can secure a rate without paying expensive arrangement fees.
What if I am buying a home?
Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be.
Home buyers should beware overstretching themselves and be prepared for the possibility that house prices may fall from their current high levels, due to higher mortgage rates limiting people’s borrowing ability.
How to compare mortgage costs
The best way to compare mortgage costs and find the right deal for you is to speak to a good broker.
You can use our best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.
Be aware that rates can change quickly, however, and so the advice is that if you need a mortgage to compare rates and then speak to a broker as soon as possible, so they can help you find the right mortgage for you.
> Check the best fixed rate mortgages you could apply for
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