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Cost of living growing barrier for energy efficiency, NatWest says

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
03/02/2023

The proportion of people planning to make energy efficient improvements to their home in the next 12 months and the next decade has fallen for the first time, with the cost of living cited as a factor.

More than a quarter (26%) of people are less likely to implement energy efficiency changes in the next 12 months due to the cost of living, reflecting a growing trend over the past few months.

According to the latest quarterly NatWest and S&P Global’s Greener Homes Attitude tracker, this is up from the 23% recorded in the previous period; up on the 17% in Q2 and 11% in Q1.

Meanwhile, one in three people earning less than £15,000 a year said the same.

Those planning to make changes over one to five years also fell slightly from 34% to 33% and from 21% to 19% for the six to 10-year period.

The proportion of people not planning to make changes in the next 10 years also rose to around one in five which is slightly up from the prior quarter.

The poll of 4,500 people also revealed 22% of homeowners said they had plans to improve their property in the next 12 months, which is up from 16% in the same period last year but slightly down on the 24% recorded in the prior quarter.

The majority of those surveyed said that the cost was the biggest barrier, with 71% of those who had no plans to change their property pointing to this factor.

This was followed by availability of financing options at 29% and level of disruption work would cause at 28%.

EPC ratings increasingly important for buyers

The study found that although homeowner plans had been dimmed by cost of living concerns, Energy Performance Certificate (EPC) ratings are becoming more important to prospective buyers.

Around one in five of those looking to buy in the next 10 years are targeting properties with an EPC rating of C or above, an increase from 17% in the same period last year.

Of those who had moved home in the last 12 months, 22% said getting a property with a higher EPC rating was one of main factors they would consider.

Among those considering moving in the next year, 32% said that the EPC rating was the main factor or a key factor they would look at.

However, cost of living and rising mortgage costs remain a concern for buyers, with half considering moving in the next year citing this as a crucial issue.

One in five homebuyers who had considered moving but aborted these plans cited the cost of living, while 15% said it was down to mortgage rates.

Lloyd Cochrane, head of mortgages at NatWest, said: “The latest Greener Homes Attitude tracker shows that although people are placing importance on EPC ratings and individual energy saving measures, there are still barriers when it comes to taking steps in retrofitting their homes.

“We know that homeowners are keen to make changes that will save money and combat climate change – but the costs of making these changes remain a barrier for homeowners.”

Related: Green mortgages branded a ‘gimmick’ as rates are higher than standard deals.