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UK & I Thinking Sustainably UK & I Thinking Sustainably

Changing Attitudes Towards Greener Homes in the Face of the 'Cost of Living Crisis'

Ellie Healy • 04/10/2023

The Climate Crisis and Its Impact on the 'Cost of Living’ 

The climate crisis is the defining crisis of our time and over the past 10 years we have witnessed its widespread effect, including bushfires in Australia, severe flooding in Italy and the worst drought in East Africa in 40 years.  

Sadly, the magnitude of this effect is set to worsen as we fail to reduce global emissions and focus shifts, at least in the short term, to tackle the immediate impacts of the ‘cost of living crisis’ *, which the UK has battled synchronously since late 2021.  This shift in focus is evidenced in Prime Minister Rishi Sunak’s decision to delay key green policies last month, affecting the minimum energy efficiency standard for domestic properties and the phasing out of gas boilers. To tackle either of these crises’ we must not do so in isolation.  *The ‘cost of living crisis’ refers to the fall in ‘real’ disposable incomes (that is, adjusted for inflation and after taxes and benefits).  

Changing Attitudes  

According to provisional figures provided by the Department for Energy Security and Net Zero External Link the residential sector accounted for approximately 17% of all carbon dioxide emissions in the UK in 2021 , meaning our homes are key to cutting emissions and reducing our chance of hitting the 1.5℃ global warming threshold. 


Given that 80% of the homes that will exist in 2050 - the year to which the UK has legally committed to reaching Net Zero - have already been built (The London Energy Transformation Initiative External Link), tackling existing stock seems like a good place to start. 

In Q3 2022, NatWest External Link reported a peak in the number of homeowners who intended to make sustainable improvements to their homes. The data collected revealed that 23% of homeowners intended to make improvements over the next 12 months and an additional 45% intended to do so over the next ten years.   

Soaring inflation and rising interest rates have, however, dampened intent. In Q4 2022 and again in Q1 2023 NatWest reported a decline in these numbers, for the first time since the tracker began in May 2021.   

In Q1 2023, approximately 63% of homeowners intended to make sustainable improvements to their property in the next 10 years, down from 66% in Q4 2022 and 68% in Q3 2022.  

A similar declining trend can be seen for those who intended to improve their property over the next 6 – 10 years, 1-5 year(s), and 12-month period:  

  • Approximately 17% of homeowners reported their intention to make sustainability improvements to their property over the next 6 – 10 years in Q1 2023, down from 19% in Q4 2022 and 21% in Q3 2022; 
  • Circa 31% reported their intention to make improvements over the next 1 – 5 years down from 33% in Q4 2022 and 34% in Q3 2022 and; 
  • Only 22% intended to make improvements over the next 12 months, down from 21% in Q4 2022 and 24% in Q3 2022. 

    Source: NatWest, S&P Global

According to NatWest External Link, the cost of implementing sustainable features and/ or technology is the greatest barrier for homeowners. In Q1 2023, 71% of homeowners cited this as the main reason for not wanting to improve their property over the next decade.  

Research conducted by RICS External Link in collaboration with YouGov further supports this narrative. Latest data reveals that 45% of the homeowners surveyed intend to use their savings to cover existing living expenses, while only 34% said they would consider investing their savings into energy efficiency features to reduce future costs. 

In addition to this over 70% of individuals who took part in the YouGov External Link survey stated that first and foremost the government should prioritise tackling the ‘cost of living crisis’, confirming the WEF’s fears. 


According to the Home Builders Federation External Link, the average new-build house emits approximately one third of the carbon of their older counterparts and can save occupiers, c.£2,200 a year in energy bills. 

In research published in Q4 2022, Legal & General Capital (L&G) External Link in partnership with YouGov reported that, after location, potential savings in energy bills is considered the most important factor when searching for a new home. L&G reported that just over 30% of individuals polled were willing to pay a premium for a new build property with enhanced energy efficiency features. 

L&G also reported that in July last year their Smartrcriteria tool revealed a 34% uplift in searches for eco-friendly homes.  

Demand for sustainable new-build homes in the wake of rising energy costs is further evidenced by Turley,  a planning and development consultancy. Turley reported that almost 40% of homebuyers surveyed found properties with energy efficiency features, which lower running costs, more appealing.  

To the contrary, NatWest reported a moderate decline in buyers who consider an EPC rating of C or above an 'essential' feature when searching for a new home. The proportion fell from 21% in Q4 2022 to 19% in Q1 2023. 

NatWest did, however, report that demand for double glazing and loft insulation had increased. With 38% of respondents considering double glazing an ‘essential’ feature in Q1 2023, up from 34% in Q3 2022 and 28% considering loft insulation as ‘essential’ in Q1 2023, up from 26% from Q3 2022. 

Both Turley and NatWest reported cost as being the greatest barrier to purchasing a home.  

In Q1 2023 71% of respondents to NatWest’s ‘Greener Homes Attitude Tracker’ External Link, up from 69% in Q4 2022, stated their greatest consideration when purchasing a property was cost. While 32% of Turley’s respondents admitted that current financial challenges have made them less likely to buy or move home in the next five years. 


A report published by Sigma Capital Group External Link in February 2023 revealed that while renters typically have lower expectations when choosing a property, they expect and are attracted to homes with energy efficiency features that will help cut their heating, water and electricity costs.   

Sigma’s report revealed that 61% of renters consider energy efficiency features when choosing a property. Double or triple glazing was identified as the most important enhancement, with approximately 65% of renters expecting rental properties to have this feature, while EV charging ports were identified as the least important enhancement, with only 9% of renters expecting this feature. 

Source: Sigma Capital Group

With regards to rental premiums, current evidence remains inconclusive on whether these exist in properties with “green” features. While Sigma found that renters were not willing to pay higher rents, L&G reported, in November 2022, that despite the ‘cost of living crisis’ renters were willing to pay a premium of up to 13%. 

Promoting Green Homes  

In the wake of the ‘cost of living crisis’ it is evident that while many see the appeal of a green home, it is unlikely they will be able to afford to retrofit their existing property or pay a premium to purchase or rent a greener property in the near future. Financial support and/or incentives are therefore vital to supporting the delivery of green homes and supporting homeowners in retrofitting existing properties. 

Government Grants & Schemes 

The government has committed to investing £12 billion in Help to Heat schemes External Link to support households with the cost of retrofitting their property and in turn reduce carbon emission across the UK. This includes the Boiler Upgrade Scheme, which offers a grant to homeowners who replace their boiler with a low carbon alternative and the Energy Company Obligation Scheme, which requires most UK energy suppliers to financially support households with home improvements including insulation and boiler upgrades.   

These schemes offer support to homeowners and social housing tenants and as the cost of energy bills continue to rise, they will likely offer greater appeal. 

Green Mortgages  

Green Mortgages offer homebuyer’s an incentive for borrowing on a green home or for retrofitting an existing home. The Bank or Lender may offer a lower interest rate or an increased loan amount. At present, Green Mortgages make up a small percentage of the UK mortgage market but rising interest rates could help increase awareness of this mortgage product and its appeal. 


In addition to the above regulation will play a significant role in reducing the proportion of greenhouse gas emissions that come from the UK’s residential sector. In some instances regulation may effectively tackle both the climate and ‘cost of living’ crisis’ in tandem.   

According to the Home Builders Federation External Link, the average new build property, built after the implementation of the Future Homes Standard in 2025, will cost approximately 70% less in energy bills compared to its traditional counterpart. This is of great importance during a time where the majority of homeowners cite the rise in gas or electricity bills as the main reason for the increase in their cost of living (ONS External Link). 

Regulation, however, is unlikely to have a major impact on the existing owner-occupier market, where it is harder to enforce, and in some cases may risk driving the cost of living up further, as landlords, developers and investors look to offset the cost of implementation. Other measures will therefore be required. 


It is evident that the ‘cost of living crisis’ has affected attitudes toward green homes. For homeowners, retrofitting offers less appeal as they prioritise tackling short-term costs rather than investing in technology that would offer long-term energy cost savings. For homebuyers and renters who are likely to see the immediate benefits of energy saving measures, greener homes offer greater appeal, with some willing to pay a premium for this product.  

To ensure the ‘cost of living crisis’ does not undermine efforts to reduce emissions from the UK’s residential sector, it is important the two are not tackled in isolation. The UK government, lenders, and energy suppliers must raise awareness of what can be done to improve the efficiency of our homes, how cost effective it may be and how soon households are able to recoup the benefits.   

Sustainability is a complicated topic. And while most of us are generally familiar with the term, the details may be less transparent. Cushman & Wakefield sustainability experts have produced thought leadership to help you navigate its critical components. 
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