Efficient Homes Hold Value in UK

Humans are not very rational by nature. Contrary to what libertarians would have you believe, sometimes we don’t know what’s best for us … or we do but we just choose to ignore our best interests. More often than not, however, we come to understand the solutions to our predicaments and we act, but just a little late. 

That’s exactly what seems to have happened in the United Kingdom. The island nation’s energy squeeze predates the rest of the continent’s by a couple years. Since energy prices started to soar in the UK in about 2019, energy commentators imagined that long ignored energy efficiency incentives and other modes to cut consumption would suddenly soar in popularity. That didn’t happen. 

Here are a collection of quotes from posts I’ve done the past few years that paint of picture of the Brit’s collective failure to act in their best interest:

“Nearly two thirds of UK homes fail to meet long-term energy efficiency targets, according to data analysed by the BBC.”

“More than 12 million homes fall below the C grade on Energy Performance Certificates (EPCs) graded from A-G.”

“Experts say retrofit measures are needed because so many homes were built before the year 1990.”

“A sharp rise in gas and electricity bills means energy efficiency has never been more topical. The UK desperately needs to better insulate millions of old homes to save energy and reduce emissions, while supporting a transition to low carbon heating like air source heat pumps, yet so far policies have mixed results. The Green Homes Grant, for instance, which offered support in these areas reached as little as 5% of its desired targets.”

Finally, however, Brits seem to be catching on. A new report by the Royal Institution of Chartered Surveyors found that energy efficient homes in the UK are holding their value despite property values overall dropping for a third straight quarter. That’s a big deal. 

It will be interesting to see if UK’s energy efficient homes continue to hold their value if the market slides further, as it’s expected to: “Nationwide Building Society expects an 8% to 10% drop in house prices this year, and has penciled in a “worst case” scenario where properties lose 30% of their value.”

I also wonder if the taste for energy efficient homes in the UK is here to stay, despite any future economic rebound or cheaper energy prices. That would be a nice silver lining to the country’s current economic crisis. 

It’s worth noting that UK home buyers are not alone in their interest in energy conservation. Policy makers too have stressed the importance of EE. 

A bi-partisan group of UK MP's are calling for a wartime style energy efficiency effort, according to this article in the Guardian. The MP's activity is tied to a recent government study that recognizes EE as the fastest way to cut emissions. The report, which was commissioned in the summer in response to energy price increases related to Russia's invasion of Ukraine, also advocates accelerating new generation projects, from solar and wind to gas fields. 

The British government has already unveiled a £6bn energy efficiency plan, but the MP's say it needs to be rolled out faster:  “Those in fuel poverty cannot afford three winters of delay. It is a false economy to hold this money back at a time when households are struggling and the taxpayer is having to spend billions to subsidize energy bills.”

Usually, things have to get pretty bad for people to venture away from the status quo. That seems to be what’s happened with energy conservation across the pond. Better late than never, I say.