The online real estate marketplace Rightmove has discovered that as purchasers become more aware of the environmentally friendly characteristics of buildings, they are requesting price reductions on properties with the lowest energy efficiency ratings. The trend precedes possible government initiatives to increase the energy efficiency of UK households as part of national ambitions to achieve net zero carbon emissions by 2050.

The results are from the recently released Green Homes Report by Rightmove. It claims that sellers who have raised their property’s environmental performance have gotten higher prices, generally by approximately 16% compared to those who haven’t. The analysis included 200,000 Rightmove listings that had sold twice, the second time for a higher Energy Performance Certificate (EPC) rating.

According to Tim Bannister, Director of Property Science at Rightmove, “it’s likely to be a gradual rather than a quick transition, but we can already see the green price premium when changes are made.”

Buyers are increasingly using Rightmove to conduct green searches, with “solar panels” moving up from number 500 to position 98 in its list of top keyword inquiries. From 1000, “Heat Pumps” increased to 190. According to the firm, realtors are using “sustainable” and “low carbon” as selling features in their property listings on Rightmove 73% more frequently currently than they were at the beginning of 2020.

Even if a homeowner does not plan to sell, there are incentives for them to make adjustments. According to Rightmove, cutting energy costs was the most popular, followed by enhancing

Plans by the government to force rental properties to meet minimum energy standards, set at a C-level EPC, may result in a reduction in the market’s already scarce supply of available inventory and a consequent increase in rents.

Bannister forewarned that some landlords would sell up if the government enacts laws requiring them to make changes to their properties. “Before the advantages of greener housing trickle through, it might worsen what is already a highly stock-constrained rental market, raising rents for available homes in the short run.”

It’s possible for purchasers that as the UK comes closer to a net-zero future, lenders may have a more direct relationship with house energy ratings.

In ten years, Bannister predicted, “I don’t think it would be a surprise if we see that people taking out mortgages or remortgaging a home with the lowest EPC ratings find that they miss out on the best mortgage rates.”