Buyers value energy efficiency but resist paying a premium

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Energy efficiency matters to 85% of homebuyers but only 2% would pay significantly more for a greener property, according to research from LRG.

The property services group found that a further 26% would pay a little more for an energy-efficient home, while the largest group, 37%, would pay no premium.

The findings are contained in LRG’s Sales Report Summer 2026, based on a survey of more than 700 buyers and sellers. Some 36% of buyers said they would pay more only if the additional cost was recovered through lower energy bills over time, suggesting that efficiency is increasingly being judged as a financial calculation rather than by the letter shown on an energy performance certificate.

The calculations have shifted in favour of more efficient homes after energy prices rose by 13% on July 1, adding about £18 a month to the bills of a typical household, according to Ofgem.

Rightmove’s energy bill tracker estimates that a typical three-bedroom semi-detached home with an EPC rating of C costs £1,766 a year to run, compared with £2,429 for a D-rated property. The difference is £663 a year, or about £55 a month.

That monthly saving is close to the repayment on an additional £10,000 borrowed over 25 years at typical fixed mortgage rates. A buyer who declines to pay £10,000 more for the efficient property could therefore end up paying a similar sum to an energy supplier over time.

Neil Louth, The Acorn Group
Neil Louth, The Acorn Group

Neil Louth, group executive director of LRG and chief executive of The Acorn Group, said: “Buyers have become far more informed, and this research shows exactly how they’re making decisions.

“They can see what a home will cost to run before they’ve even booked a viewing and, particularly in London where every pound of a household budget matters, running costs have become part of the affordability calculation from day one.

“Buyers are telling us they won’t pay extra for a green badge, but they will always do the maths on the bills.

“Too many sellers still assume buyers are only looking at kitchens and bathrooms. Increasingly, they’re asking how much it costs to heat the property, when the boiler was replaced and what their monthly bills are likely to be.

“Those conversations weren’t happening five years ago. They are now.”

Buyers surveyed were already taking such considerations into account at viewings. Asked what they wished sellers would do before marketing a home, several said practical information about running costs should be available, including the age and service history of the boiler and details of the property’s meters and heating system.

Government policy is also placing greater emphasis on household costs. Under confirmed reforms, estimated annual energy costs will become one of the headline measures shown on an EPC.

The Boiler Upgrade Scheme offers homeowners in England and Wales £7,500 towards a heat pump, rising to £9,000 for homes heated by oil or liquefied petroleum gas from July 21. The government’s £15 billion Warm Homes Plan also promises low-interest loans for solar panels and batteries.

Louth said: “This research tells us buyers aren’t paying for an EPC certificate. They’re paying for what it means to their monthly finances.

“If two similar homes are available, the one that’s cheaper to run is becoming the easier decision. That’s where energy efficiency has real value.

“The green premium may be a myth, but the cost of poor efficiency certainly isn’t. Sellers shouldn’t expect an energy-efficient home to command a huge premium, but equally they shouldn’t underestimate how quickly buyers will use higher running costs to negotiate.

“In today’s market, that’s a conversation worth having before a property even goes on sale.”

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