New research from REP: “Does energy efficiency matter to home-buyers?"
9 January 2015
New research by Dr Anupam Nanda and Professor Peter Wyatt, with colleagues from Cambridge and UCL, reveals that more energy efficient properties attract premium prices.
New research REP academics Dr Anupam Nanda and Professor Peter Wyatt, working with Dr Franz Fuerst (Cambridge) and Professor Pat McAllister (UCL) investigates whether energy performance ratings, as measured by mandatory Energy Performance Certificates (EPCs), are reflected in the sale prices of residential properties. The research, which is funded by the UK Department of Energy and Climate Change (DECC), is the first large-scale empirical study of this topic in England, involving 333,095 dwellings sold at least twice in the period from 1995 to 2012. Applying hedonic regression and an augmented repeat sales regression, they find a positive relationship between the energy efficiency rating of a dwelling and the transaction price per square metre. Some of the research highlights are:
- Dwellings in EPC bands A and B sell for a 5% premium, all else equal; for C, it is 1.8%.
- The effect is about £8,900 on an average house price (£177,824 as of Aug. 2014).
- There is considerable variation in these effects by region and property types.
The full research paper is available here: