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Going Green: Demand grows for energy efficient homes, says RICS

There’s been a significant rise in buyer interest in the energy efficiency of properties - but so far it’s making no difference to house prices.

The Royal Institution of Chartered Surveyors, in its latest monthly market survey, asked members to gauge consumers’ willingness to reduce domestic carbon emissions. 

Whilst one-third of surveyor respondents have seen an uptick in demand for energy efficient homes, but over three-quarters of respondents see little to no impact of having an energy efficient property on sale prices.

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Some 62 per cent of respondents anticipate demand for energy efficient properties improving over the coming three years; the current barrier for many to improve enhance their energy efficiency is cost - a point made by an overwhelming 85 per cent of respondents.

RICS chief economist Simon Rubinsohn says: “As long as there is a lack of choice for would-be buyers, it is clear that buyers ambition to be more climate friendly will have to move down their list of priorities. 

“The data from today’s report suggests that additional government funding and investment alongside new financial solutions appealing to homeowners, landlords and investors could pave the way for decarbonising UK homes.”

Meanwhile the traditional market snapshot contained in the monthly RICS report suggests that new instructions are falling once again, exacerbating a stock shortage and price rises.

A net balance of nine per cent of respondents saw another dip in the volume of sales agreed over the past month, with the main issue being a lack of stock for would-be buyers.

Despite a rise in new enquiries, agents currently only have 37 properties on their books on average. Meanwhile, a net balance of 20 per cent of contributors have reported a fall in new properties listed for sale.

This is not only impacting on sales but is a significant factor behind current house price rises. 

In October a net balance of 70 per cent of respondents cited a rise in house prices, with some expecting the trend to continue over the next three months - so well into 2022. 

Rubinsohn says: “Although the mood music around interest rates does appear to be shifting, for now the stronger influence on the housing market is the ongoing imbalance between demand and supply. 

“The inventory on agents’ books appears to have slipped back towards historic lows and this seems to be underpinning both the current price trend and expectations for the next year. 

“Meanwhile although there is likely to some drop in activity in the immediate aftermath of the expiry of the stamp duty break, most activity indicators currently remain solid. Indeed, the main challenge for buyers looking forward may once again be a lack of choice of property on the market.”

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