Would you pay 15% premium for a low-EPC buy to let?

The Santander bank says buyers - landlords and owner occupiers alike - are showing more interest in buying energy efficient homes.

The bank asked 2,000 property owners and 175 agents and found 85 per cent of agents reporting increased demand in the past 12 months. 

Estate agents put it down to the rising costs of energy bills, alongside increased number of green mortgage products from lenders and a greater awareness of the need to live more sustainably to combat climate change.

Not only is there growing awareness but estate agents report this is creating a ‘green premium’ in the market, with buyers spending on average 15.5 per cent more for a property with a high EPC rating.   

But the bank admits that while engagement is growing, there remains a knowledge gap, with three in five buyers not knowing the EPC rating of the property they currently live in.
 
The research shows that agents are being proactive in helping bridge this gap, with two thirds in the past 12 months undertaking training to improve their knowledge, and a further 29 per cent planning to do so in the future. 

In addition, three in five have updated their marketing materials to make energy efficiency information more prominent.

Graham Sellar, Head of Business Development – Mortgages at Santander comments: “The feedback from agents is striking and reveals that in an environment of rising cost of living pressures, there has been a real shift in preference among buyers for homes with reduced energy costs. 

“Agents will be a key part of raising understanding and awareness among buyers and sellers on the benefits of having an energy efficient home, so it is encouraging so many are being proactive in improving their understanding. With the findings showing a clear ‘green home premium’, the benefits are clear, and any changes made will not only reduce buyers’ bills but make the property more attractive to buyers in the future.” 

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