English Housing Survey data for 2024 suggests 42% of dwellings have the potential to be improved to an EPC ‘C’ rating or higher, with around 2% unable to reach band C, and the remainder already EPC C or higher. In 2024, the average cost to improve homes to EPC C was around £7,500. This implies an overall estimated total cost for upgrading the entire English housing stock of around £81bn. Unsurprisingly, homes rated EPC F or G have considerably higher average costs to reach EPC C compared with EPC D homes (around £17,000 and £6,000 respectively).
As part of its 2026 Warm Homes Plan, the Government’s current aspiration is to upgrade five million homes by 2030. However, the current pace of improvements is slow, given the scale of the challenge. This suggests a need for further incentives to help decarbonise homes.
Understanding the value homeowners place on energy efficiency
Using data for homes in England, we examined the extent to which those buying properties pay a premium (or discount) due to EPC rating. Our research also included other property characteristics (such as bedrooms, location and whether it is newly built) to estimate the impact on prices2.
Our analysis suggests that a more energy-efficient property rated A or B attracts a modest premium of 1.6% compared to a similar property rated D. This is equivalent to around £4,500 based on the average house price in England. There is little difference for properties rated C or E, compared with D, as shown in the chart below. We do see a small discount for the least energy efficient properties however, with an F or G rated home valued 1.4% lower than a similar D rated property. This equates to around £4,000 in cash terms.
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. For further details see our Private Rented Energy Performance Report.
What green improvements are homeowners making?
Our recent market research suggests around three quarters (78%) of homeowners expect buyers to pay more for an energy efficient home3. This was particularly evident amongst younger buyers, where nearly a third (32%) of those aged 25-34 expected buyers to pay significantly more for an energy efficient home, compared to just 5% of those aged 55+. Additionally, 69% of respondents believed that EPC ratings/energy efficiency matters more now than when they bought their home.
Over half (54%) of those surveyed were not aware of their current property’s energy efficiency rating. Despite this, 77% said that EPC rating would be an important factor when choosing a property to buy in the future. Again, this appears particularly significant for younger buyers (i.e. those aged 25-34), where nearly half (49%) stated this would be ‘very important’.
Of homeowners who had undertaken measures to improve their property’s energy efficiency in the last ten years, the most popular were: adding solar panels, improving insulation and upgrading to energy-saving windows and doors.
Just over half (55%) of those making energy efficiency improvements had added solar panels and had done so within the last two years. This also tended to be the most expensive work undertaken, with an average spend of around £11,000, compared to around £4,000 for those improving insulation.
Meanwhile, a quarter (25%) had added a heat pump (either air source or ground source). Over two thirds (68%) of these were installed within the last two years, perhaps reflecting increased public awareness and government incentives. Newer properties, particularly those built from 2011 onwards, were more likely to have had a heat pump installed.
The main reasons cited for making green improvements were to reduce energy bills (60%) and to make their home more comfortable (48%). Nearly three quarters (73%) said they had seen energy bills fall as a result of the improvements they made. This chimes with data from the Department for Energy Security and Net Zero, which suggest median equivalised fuel costs for a property rated A, B or C are around £400 per year lower versus a D-rated property and £1,200 per year lower than an E-rated property4.
Only around one in five (22%) said the main reason for the improvements was to ‘increase the property’s value’, with less than one in ten (7%) doing so as part of preparations for a sale. This suggests that most homeowners are mainly focused on their own benefit from the work. Indeed, 77% said they were more likely to remain in their current property longer as a result of the improvements they had made.
Of those who have not made green improvements, the most commonly cited reason is they cannot afford the upfront cost (54%). To assist with dealing with those costs, Nationwide offers a
0% Green Additional Borrowing mortgage
5, which enables existing customers to borrow between £5,000 and £20,000 up to a maximum of 90% LTV across a two or five-year term.
A quarter (25%) said such improvements were not a priority, with 19% stating they wouldn’t reduce bills by much. 21% said they were unsure which improvements would be most effective, whilst 17% pointed to a lack of information or understanding of what to do.
