Cost of living hits brakes on greener home plans for homeowners, says NatWest

The latest research from NatWest and S&P Global has revealed that homeowners are hitting the brakes on making sustainable changes to their properties. As the cost of living continues to rise, over a quarter (26%) are less likely to implement energy efficiency measures in the next 12 months.

The Greener Homes Attitude Tracker is conducted on a quarterly basis. The tracker, based on responses from 4,500 people across the UK in Q4, gives a deeper understanding of homeowners’ and homebuyers’ attitudes towards certain environmental features and energy saving improvements of their homes.

Energy efficiency is a home improvement measure, but cost is king

The final quarter of 2022 saw a setback in homeowners’ plans for energy efficient home improvements. 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%). Over a quarter (26%) of homeowners said the rise in the cost of living had made them less likely to implement energy efficiency measures in the next year.

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%).

Rise of the EPC rating

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.

What measures to minimise energy surge?

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.

Homeowners are increasingly encouraged to make savings on the costs of running appliances like tumble dryers and dishwashers which are among the most energy consuming devices in the household. The national average price per pence/kWh of electricity is currently 52p.

The aggregate impact of energy saving measures can be very different on actual energy usage, so it is important consumers research what the main drivers of their heating or energy costs may be, and how best to alleviate them

The survey showed the most common energy habit that people are taking action on is avoiding overfilling the kettle, cited by almost half of households (48%). Many reported turning down the heating – with almost half (43%) of households changing their behaviour – even going as far as turning off radiators altogether (37%). Worryingly, these actions were generally more common among older age groups.

Almost a fifth of respondents now also place importance on buying sustainable clothing in a bid to avoid ‘fast fashion’ (reported by 17% of households compared to 14% in Q4 2021).

Others common actions taken included switching off devices (47%), using appliances less often (46%) and reduced use of lighting (45%).

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).

Greener Homes Retrofit

NatWest is currently helping to fund a series of greener home retrofit pilots for 9 customers across the UK, taking customers on the journey from consideration of these improvements to making them a reality to inform future products. Through the Sustainable Homes and Buildings Coalition, NatWest is working with industry partners Worcester Bosch, Citizens Advice and British Gas to assess the EPC rating of their properties and install appropriate solutions to improve energy efficiency and cut emissions such as insulation upgrades, heat pumps and solar panels.

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”