A new survey from LRG has exposed an uncomfortable truth for anyone banking on green premiums to justify retrofit spending: 85% of buyers say energy efficiency matters, yet only 2% would pay significantly more for a property with superior energy performance. The research, based on responses from over 700 buyers and sellers, found that 36% would consider paying more only if the additional cost were offset by demonstrably lower running bills. In other words, buyers want the benefits of efficiency without underwriting the cost of achieving it.
This disconnect matters enormously for the UK property market, particularly as government policy continues to push in the opposite direction. Proposed reforms to the Minimum Energy Efficiency Standards (MEES) would require rental properties to reach EPC band C by 2028, a regulatory cliff-edge that could affect an estimated 2.5 million rental properties currently rated D or below. Landlords facing retrofit bills of £10,000 to £15,000 per property, according to various industry estimates, have been operating on the assumption that improved ratings translate into higher achievable rents or sale prices. This survey suggests that assumption is shakier than the policy narrative implies.
The regional picture adds further complexity. In London and Surrey, where average property values comfortably exceed £500,000, the absolute cost of retrofitting represents a smaller proportion of asset value, making the investment easier to absorb and market as a lifestyle benefit. In Manchester, Birmingham, Leeds, Liverpool and Newcastle, however, where average values sit considerably lower — often between £180,000 and £250,000 — the same retrofit costs represent a much larger percentage of the asset's worth, squeezing yields for buy-to-let landlords who cannot simply pass costs on to tenants unwilling to pay a premium. Northern landlords, already managing tighter margins than their southern counterparts, face the sharpest version of this dilemma.
For first-time buyers, the findings offer a pragmatic reassurance: energy efficiency is desirable but not decisive, and sellers who have invested heavily in EPC upgrades should not expect buyers to reward that spending pound-for-pound at completion. This is a market where efficiency functions more like double glazing or a new boiler — expected as standard rather than valued as a premium feature. Sellers and developers marketing new-build stock with high EPC ratings would be wise to frame efficiency in terms of monthly bill savings rather than abstract environmental credentials, since the data clearly shows buyers respond to pounds and pence, not letters and numbers.
Commercial and institutional investors should read this survey as a warning about mispriced risk in the retrofit calculus. Build-to-rent developers and portfolio landlords have often modelled energy upgrades as value-accretive investments capable of commanding rental premiums of 5% to 10%. If tenant and buyer willingness to pay tops out at a fraction of that, the economics of large-scale retrofit programmes become considerably less attractive without direct subsidy or tax incentive. This has knock-on implications for lenders too, as green mortgage products offering preferential rates for EPC C-or-above properties may need to rely on regulatory compulsion rather than market demand to drive uptake.
Over the next 6 to 12 months, expect increasing divergence between compliance-driven retrofit activity and market-driven demand. Landlords facing the 2028 MEES deadline will proceed with upgrades regardless of buyer enthusiasm, simply to remain lettable, while discretionary sellers in the owner-occupier market may deprioritise costly upgrades that deliver poor return on investment at point of sale. Developers building speculatively should focus messaging on running-cost transparency, potentially through fixed annual energy cost guarantees, rather than EPC certificates alone. The government's own impact assessments for MEES reform will need to grapple with this evidence, since a policy premised on market pull may instead require stronger enforcement mechanisms and clearer financial incentives to achieve its 2028 targets.
The clearest conclusion from this data is that energy efficiency in UK housing has become a compliance issue disguised as a consumer preference. Buyers care, but not enough to pay for it voluntarily, which means the burden of decarbonising the housing stock will fall overwhelmingly on regulation, subsidy design, and landlord balance sheets rather than organic market demand. Anyone underwriting a retrofit strategy on the premise that green premiums will materialise at resale is basing that strategy on a narrative the market itself does not support.
