Energy efficiency has become a key consideration when buying a home. But how much attention should you pay to making your home more efficient – and ultimately, do energy-efficient homes increase property value in the UK?
That’s the question we’re here to answer. With so much information flying about, it can be easy to feel a bit lost, especially with how fast the housing market moves!
One of the most significant studies on energy efficiency took place over a decade ago. It showed a link between a property’s Energy Performance Certificate (EPC) rating and its market value, with properties that have a higher A or B rating fetching nearly 14% more value per square metre than lower counterparts.
But how accurate is that today, and is investing in energy-efficient solutions for your home worth it? Let’s dive in.
Energy efficiency isn’t about how much energy you use
Energy-efficient homes aren’t properties that use less energy. It’s about how effectively you use the energy – basically, a way to make sure that you’re wasting as little energy as possible.
Generally speaking, improving your home’s energy efficiency can lead to lower bills and a reduced carbon footprint, a win-win for your finances and the environment.
EPCs are a good way of showing a property’s energy performance score converted to a letter rating system from A to G, with A being the most efficient.
In a 2024 report, homes in England recorded a median score of 68, while those in Wales had an EPC score of 67 (Office for National Statistics, 2024). In other words, most homes in the UK are rated D.
If you’re looking to sell a property, you will need to get an EPC certificate from a qualified assessor if you haven’t already got one. Although EPCs are valid for 10 years, they can be reassessed! It might be a good idea to do so if you’ve done a lot of work since the previous assessment.
So, how do they affect a property’s value? Let’s find out.
How energy efficiency impacts your property’s value
Energy-efficient houses with high EPC ratings can increase property value and attract buyers.
The Mortgage Advice Bureau (2025) reveals that 29% of homebuyers consider the EPC rating a defining factor when buying a home. According to the UK-based mortgage consultancy firm, a further 61% will consider making an offer on a home with a good EPC rating.
In another study by Knight Frank, a leading real estate consultancy entity, moving from EPC band D to C could add around 3% value to a property above local house price growth (Knight, 2022).
For properties that move two bands up (e.g., E to C), the property value can increase by 8.8%. In addition, upgrading from an F or G to a C potentially adds a remarkable 19.6% in value.
The increase in property value by improving EPC ratings differs by region. Homes in the North East have the most substantial percentage increase in value, with 12.2%. Meanwhile, the South West averages around 7.7%.
Want to make sure your property gets the best value when selling? Find out the top reasons a property might get downvalued here.
The type of energy can have a big impact on property value
Improving EPC ratings can have a positive effect on property value. Interestingly, another big factor is the type of energy a property uses, as specific features like solar panels can also increase value.
By generating their own electricity, homes with solar panels offer significantly reduced energy bills – a powerful draw in today’s economic climate. A 2021 analysis shows that properties with solar panels can possibly get a 21% price premium over their non-solar counterparts (Billany, 2021).
Despite a downward trend in returns, mainly because it’s cheaper to install them now, properties with PV panels are generally assured an additional £14,000 to £16,000 in value, based on an average home price of £230,500 (Asproudis et al., 2024).
Our current home had solar panels installed when we bought it. It’s something we wanted to do anyway, so the fact that the property already had them was a big draw. We were prepared to pay for it rather than another comparable home, which didn’t have the solar panels.
In addition to solar panels, the type of heating system can also affect property value. Non-standard heating systems, like heat pumps, can attract an average of a £15,000 price premium over properties with traditional heating systems.
So do energy-efficient homes increase property value in the UK? Yes they do.
3 quick ways to improve your energy efficiency
Making your home more energy efficient doesn’t always require major work. Increase your home’s EPC rating (and your property value) with one of these 3 quick wins!
Upgrade your insulation
Insulation is what keeps your home warm and stops heat from leaking out. To improve your insulation, you might want to upgrade your windows to double glazing (if you haven’t already) or add extra layers of insulation to your loft, walls, or even floors.
Use energy-efficient lighting
Try swapping out traditional bulbs for energy-efficient LEDs. This small change is relatively inexpensive and can provide substantial long-term savings while contributing to a better EPC rating.
Install smart devices
Smart homes aren’t just a fad. Having smart meters for your heating, as well as other appliances, can help you set more efficient programs and monitor your usage in real-time.
For more long-term investments, you might want to consider installing solar panels or upgrading your heating system.
Installing solar panels is a fantastic way to generate your own clean electricity from a renewable source, while increasing your property’s value.
Although our home already had them installed, we added two more panels to increase the amount of energy we can generate. At the same time, we also installed a battery to store this energy, which was a game-changer when it comes to our energy bills.
Not only did we increase the value of our property, but we also benefit from lower energy bills. If you can afford it, it’s definitely worth doing.
Your heating system also plays a crucial role in your home’s energy performance. Upgrading to a more efficient, low-carbon option like an air source heat pump can significantly improve your EPC rating, reduce your energy consumption, and enhance heating performance.
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Is increasing energy efficiency worth the costs?
The cost of increasing energy efficiency varies depending on the work involved. For instance, installing double-glazing windows could cost around £1,200 for the entire property, while installing solar panels could cost up to £7,000 for the panels and installation.
If you’re already on a high EPC rating, you might find that the increase in value might not be worth the cost of some of the bigger conversions.
However, changing lightbulbs to LEDs is an affordable change that every property could consider, and many energy providers offer the installation of smart meters free of charge to help create more smart homes.
There may also be government schemes that you could apply for to help cover the costs of making a home more energy efficient. For example, the ECO4 Grant scheme funds eligible low-income households and landlords to undertake energy efficiency upgrades like insulation and heating improvements.
The government’s Boiler Upgrade Scheme will give you £7,500 towards a heat pump installation. That’s not bad, given that it can be expensive, especially for older homes.
We benefited from the scheme for our heat pump. Without it, we wouldn’t have been able to afford the installation.
It’s always worth checking for any available grants, as it could make it cheaper or enable you to afford it.
The benefits of prioritising energy efficiency
We’ve gone through the potential increase that energy efficiency can have on your property’s value and how you can achieve it. But is it worth it?
If you’re looking to sell your property, investing in energy efficiency could help you fetch a higher sale price and help your property stand out. As we’ve discussed, energy-efficient homes, particularly those with A or B EPC ratings, tend to sell for more.
If you’re in the market to sell, the investment could be worth the return. Energy efficiency can help your property stand out in a crowded market, drawing more potential buyers and potentially leading to a quicker sale.
If you’re planning on renting out a property, then investing in energy efficiency now could help save you in the long run. The UK government is set to mandate a minimum EPC rating of ‘C’ for all rental properties by 2028.
Failing to meet this standard will prevent you from legally letting out your property, making energy efficiency upgrades a critical investment for your rental income.
If you’re not thinking about selling just yet, investing in energy efficiency can help reduce your energy bills, helping you save costs in the long run. It also helps lower your own carbon footprint, helping you contribute to a greener future. Isn’t that nice?
Energy-efficient homes do increase property value in the UK
As we’ve explored in this blog, improving the energy efficiency of your home by raising your EPC rating can increase the value of your property. In addition, having cleaner energy sources like solar panels and heat pumps can also make your property more desirable, giving you better prices when it comes to selling.
Generally speaking, buyers are willing to pay more for homes that promise lower running costs, environmental benefits, and future-proofed living.
Ready to sell your own property? Find out all the advice you need for a smooth and quick sale here at Property Road.
