Homeowners Investing in Green Home Improvements: Expectations and Returns

Homeowners are increasingly looking to invest in green home improvements, with expectations of a significant return on investment over the next few years. According to data from Coventry for intermediaries, younger homeowners are particularly optimistic about the potential value these improvements can bring to their properties.

The research shows that almost three quarters of Millennial and Gen Z buyers believe that energy efficiency improvements will increase the value of their homes. In contrast, over half of Baby Boomer buyers also see the value in making green changes to their properties.

On average, homeowners are planning to spend just under £8,400 on green home improvements over the next three years. Millennials and Gen Z owners expect to see an average return of £11,123 from a £9,035 investment after 20 years, while Boomers anticipate a return of £5,379 from an initial investment of £7,732 over the same period.

Despite the financial pressures of higher mortgage rates and the ongoing cost of living crisis, 40% of homeowners are still motivated to make eco-friendly changes in order to save money on energy bills. The Energy Saving Trust estimates that installing A-rated double glazing could save up to £135 a year on energy bills, while solar panels could save homeowners anywhere between £150 and £630 depending on their electricity usage.

The importance of Energy Performance Certificate (EPC) ratings is also on the rise, with 59% of people now considering the rating when searching for a home. According to Rightmove, an EPC rating change from F to C could see an average increase of 15% in the value of a home.

Jonathan Stinton, Head of Intermediary Relationships at Coventry for intermediaries, emphasized the opportunity for brokers to educate and support homeowners on the benefits of green home improvements. He highlighted the long-term value that energy efficient changes can bring to properties, not only in terms of reducing energy bills but also in boosting resale or rental appeal.

Stinton also pointed out the role brokers can play in helping clients navigate the upfront costs of these improvements, by discussing green mortgages and other incentives that could make it easier for homeowners to make their properties more energy efficient. Overall, the research suggests that green home improvements are not just a trend, but a tangible asset that can add significant value to a home in the long run.