One in five prospective homebuyers (22%) are planning to make their homes more energy efficient in the hope of securing more favourable mortgage deals, according to new research by Mortgage Advice Bureau (MAB).

The research also found that 81% of prospective buyers, including first-time buyers, are planning to make energy efficiency improvements to their future homes.

MAB’s findings, based on a study among 1,003 prospective homebuyers, revealed that the primary reason behind making such improvements was wanting to lower their monthly utility bills. This is largely driven by a desire to reduce household running costs, as homeowners grapple with the ongoing cost of living crisis and concerns that housing costs will remain elevated.

Others also cited financial benefits as a key driving factor, with 22% of prospective buyers hoping that energy efficient changes could potentially lead to more favourable mortgage deals. Other reasons included 32% who believe these improvements could make their homes more desirable when it comes time to sell.

MAB’s deputy CEO, Ben Thompson, said that the strong interest in energy efficiency upgrades highlights a “willingness” among buyers to retrofit their property, but noted that buyers must be supported and enabled to make upgrades while interest rates remain high.

“The UK’s housing stock is some of the leakiest in Europe, and to be successful in the race to net-zero, this will need to be tackled,” Thompson said. “This is something both the mortgage industry and the Government will need to work on together.

“Enhancing the attractiveness of green mortgages through increasing the amount that can be borrowed, a lower rate or cashback for example, could be a powerful tool in helping to transition to a more sustainable and environmentally friendly housing sector.”

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