"Energy efficiency is a key consideration for house hunters so properties with these types of modifications are in huge demand"
Barclays Greener Home Reward scheme is to be extended following a study by the lender and Ipsos of nearly 3,000 homeowners which found that misconceptions around the cost and inconvenience of installing energy efficiency-related modifications are among the issues holding homeowners back from making retrofitting upgrades to their homes.
No additional lending is required to benefit from the scheme and all eligible new and existing Barclays UK residential mortgage customers can sign up. Customers must register for the cash reward online and then make and pay for a selected home energy efficiency-related improvement.
Customers can choose to install any one of several home improvements from a set list, including an air-source heat pump, double or triple-glazed windows, solar panels, or home insulation. A TrustMark-registered business or tradesperson must complete the chosen home improvement – TrustMark is the Government-endorsed quality scheme that covers work consumers decide to have carried out in or around their homes.
Despite record energy bills over the winter months, 55% of homeowners say they do not feel confident making their homes more energy efficient, while 33% have ruled out making energy efficiency-related modifications altogether.
The Greener Home Reward extension aims to support homeowners in making energy efficiency-related changes to their homes, with new Barclays proprietary data revealing that homeowners can be encouraged to take action when improvements are made more affordable.
55% of Barclays Greener Home Reward claimants brought energy efficiency-related changes forward or made the decision to undertake works as a result of the cash reward. The most popular changes homeowners have chosen to make via the scheme are solar panels (42%), new doors and windows (24%) and insulation measures (21%).
The Barclays/IPSOS study revealed the gap between what homeowners actually paid on average to make energy efficiency-related changes to their homes, and the amount survey respondents expected to pay on average for the same modifications.
The research found that many homeowners overestimate the cost of energy efficiency-related improvements, with the largest discrepancy found to be the anticipated price of loft and roof pitch insulation, which respondents thought was more than two and half times more expensive than homeowners actually paid on average (£3,371 vs £1,213).
The cost of A-rated double/triple-glazed windows was also significantly overestimated, with respondents predicting it could cost a third (33%) more than homeowners pay on average (estimated cost £8,166 vs actual £6,125).
Homeowners misjudge retrofitting disruption
The data also showed that homeowners think the installation of some modifications will take longer than the time works actually take to complete, which could be particularly off-putting to hybrid and homeworkers who want to minimise disruption.
The most significant misconception was the length of time required to install solar panels, which was overestimated by 45% of respondents. Homeowners also considered that A-rated double or triple-glazed windows took over 22% longer to install than in reality.
Modifications could boost house prices
The research shows that 47% of homeowners agreed to pay a premium for properties that have already undergone key energy efficiency-related retrofitting modifications. When thinking about their own home, homeowners said they could be willing to pay around £23,000 more sum total for the same sized property with all of these four key energy efficiency measures installed, which represents an almost 6% uplift based on the average house price of those surveyed.
This figure climbs to £30,000 among homeowners with a house worth between £500,000 and £900,0009, demonstrating the potential returns that retrofitting might be able to offer.
Matt Hammerstein, CEO Barclays UK, comments: “Doing more across the UK’s housing stock to manage carbon emissions and increase energy efficiency in homes will help offset energy costs. That’s why we have decided to extend registrations for our Greener Home Reward until the end of January 2024 to support more customers in heating and powering their homes more efficiently.
“Our research identified myths and misconceptions about how long it takes to make energy efficient modifications and the costs involved, while our extension will also enable us to obtain greater insights to help us develop new products and services for our customers.
"We hope this extension opens the door to more homeowners planning improvements – while also providing a welcome financial boost to help them make changes ahead of next winter.”
Barclays has partnered with Property Expert and Presenter, Phil Spencer, who said: “Having worked in property for more than 20 years, there has never been greater interest in retrofitting than there is today. Energy efficiency is a key consideration for house-hunters so properties with these types of modifications are in huge demand.”
“As Barclays’ research highlights, there are common misconceptions around the cost and disruption of retrofitting a home. I know that, when done properly, energy efficiency modifications can be transformative, resulting in energy savings and making your home more attractive to would-be buyers in the future.”
Simon Ayers, CEO Trustmark, adds: “From speaking with our businesses, we know that homeowners often overestimate the time and disruption for works to be carried out, for instance, cavity wall insulation typically takes a day and loft insulation often a matter of hours.
"The important things to ensure are to get a fixed-price quotation so there are no surprises and that your installer is competent to do the work, including meeting required standards and building regulations, and has appropriate financial protections in place.”
