A year-long scoping study, which analysed Energy Performance Certificates (EPCs) from over 10,000 properties, suggests that energy efficient homes may sell faster and for a higher price than houses that are energy inefficient.
The project, whose seed funding was provided by Scotland’s 2020 Climate Group, was developed by the Group’s Built Environment sub-group, Professor Gwilym Pryce of the University of Sheffield (previously of the University of Glasgow), Professor Chris Timmins and Ms Ashley Vissing of Duke University, North Carolina, Dr Alasdair Rae of the University of Sheffield, and was based on records of thousands of property sales through GSPC.
The outcome was a project which has culminated in the completion of a Scoping Study on the Performance and Market Value of energy efficient homes.
It is the view of the Built Environment sub-group, that this study represents a major step forward in the understanding of relationships between the value of a home owner’s property and its energy efficiency. It also highlights other relevant issues such as time on the market and offers a first class opportunity for further meaningful research.
The study is careful not to state that making a home more energy efficient will directly increase the value of a home, because of the variety of factors which influence a house purchase. It does however show an initial link between energy efficiency and house prices. For example, an estimated 0.1% increase in selling price has been identified for every 1% fall in energy use per m² floor area. Likewise a 1% decrease in energy consumed per m² floor area is associated with a 0.1% decrease in time on the market.
From the data they were also able to create a simple energy inefficiency measure (total energy use divided by total floor area).
Average total household energy costs were found to be £884 per annum, and average energy cost per metre squared – which could be taken as a measure of energy efficiency – is £16.2 per m2. Current energy use per square metre, a non-monetary measure of energy efficiency, is on average around 313.4 kWh/m².
John Sheridan, co-chair of Scotland’s 2020 Climate Group, Built Environment sub-group, said, “We are delighted to have established, as a proof of concept, that the information contained in an EPC, can be systematically analysed in relation to property values. We are keen to share the outputs from this study with as wide an audience as possible in order to give us all a greater insight into potential consumer awareness and help guide future actions around climate change.”
EPCs are now a requirement, and form part of a Home Report, for every residential dwelling that comes on the property market in Scotland.