Green homes attract a surprisingly small premium despite growing buyer interest in energy efficiency, according to the latest Nationwide research.

The lender’s data found that owner-occupied properties with an EPC rating of A or B achieve a premium of only 1.6% compared with similar D-rated homes, equivalent to around £4,500 based on average house prices in England.

There was little difference in value between C, D and E-rated properties, while F and G-rated homes were valued 1.4% lower than comparable D-rated properties.

Homeowners’ expectations

The findings contrast sharply with homeowners’ expectations. Nationwide’s survey found that 78% believe buyers will pay more for an energy-efficient property, while 77% said EPC ratings would be an important factor when choosing a home in future.

For buyers aged 25 to 34, almost half – at 49% – said energy efficiency would be “very important”.

Energy efficiency continues to have a much greater impact on buy-to-let purchases.”

Andrew Harvey (main picture), Senior Economist at Nationwide, says: “It is interesting to note, however, that energy efficiency continues to have a much greater impact on buy-to-let purchases, where an A or B rated property attracts a 12.2% premium.”

Commenting on the findings, Ian Harris, President of NAEA Propertymark, says: “There is a growing interest from buyers in a property’s energy efficiency, particularly where improvements such as solar panels, battery storage and other green upgrades are already in place.”

However, he adds: “While a strong EPC rating and green improvements can help a property stand out, they are typically one factor among many in the homebuying decision. Location, affordability and property condition remain the key drivers of value.”