Cost of living a growing barrier to greener home plans: NatWest

Homeowners are hitting the brakes on making sustainable changes to their properties, according to new research from NatWest and S&P Global.

As the cost of living continues to rise, over a quarter (26%) said they are less likely to implement energy efficiency measures in the next 12 months.

The latest stats found a decrease in the proportion of homeowners planning to make improvements to the environmental sustainability of their properties in the next 12 months (from 24% in Q3 to 22%).

According to Institute for Public Policy Research, the average home could save £500 a year on bills under the new price cap from April with good insulation and heat pumps.

However, with household finances under pressure, the cost of the work required remained by far the biggest barrier to implementing green home improvements, cited by 71% of homeowners who had no plans to make changes to their property over the next decade. It was followed by the availability of financing options (29%).

Although plans may have slowed down for homeowners, the EPC rating is steadily becoming more important to prospective homebuyers, and, in doing so, the energy efficiency of a property is now a higher priority than other factors such as the amount of local green space and access to public transport.

Over 1-in-5 prospective homebuyers said that an EPC rating of C or above was an essential feature. This is potentially a result of the UK Government aiming for all existing homes to reach an EPC rating of grade C or higher by 2035, as well as cheaper bills upfront.

When it came to cost-cutting in the home, the data shows that nearly two-thirds (64%) of households are trying to minimise home energy use, up from 59% a year earlier.

When it came to longer term measures, consumers showed a desire for electric charging points and solar panels in a bid to cut costs and ‘go green’. An electric car charging point and solar panels were the green home features most likely to be installed over the next ten years (stated by 39% and 38% of homeowners respectively).

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.

"Our retrofit pilot and quarterly tracker have informed our support for customers. These insights have also formed part of our work across industry and our engagement with Government to propose policies that can work positively to support consumers improve the energy efficiency of their homes. With supply chain issues also increasingly acting as bottlenecks to the decarbonisation of our homes, it is key that we support customers financially so they are not held back from boosting demand for energy efficient products and services.”