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Is Energy Efficiency Priced in the Housing Market? Some Evidence from the United Kingdom.

Fuerst, F., McAllister, P., Nanda, A. and Wyatt, P., (2013) Is Energy Efficiency Priced in the Housing Market? Some Evidence from the United Kingdom. Working Papers in Real Estate & Planning. 01/13. Working Paper. University of Reading, Reading. pp35.

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This paper investigates whether energy performance ratings, as measured by mandatory Energy Performance Certificates (EPCs), are reflected in the sale prices of residential properties. This is the first large-scale empirical study of this topic in the UK involving approximately 400,000 dwellings in the period from 1995 to 2011. Applying hedonic regression and an augmented repeat sales regression, we find a positive relationship between the energy efficiency rating of a dwelling and the transaction price per square metre. The price effects of superior energy performance tend to be higher for terraced dwellings and flats compared to detached and semi-detached dwellings. The evidence is less clear-cut for house price growth rates but remains supportive of an overall positive association. Overall, the results of this study appear to support the hypothesis that energy efficiency levels are reflected in UK house prices, at least in recent years.

Item Type:Report (Working Paper)
Divisions:Henley Business School > Real Estate and Planning
ID Code:31737
Uncontrolled Keywords:energy efficiency, housing market, house prices, property prices
Publisher:University of Reading
Publisher Statement:The copyright of each working paper remains with the author. If you wish to quote from or cite any paper please contact the appropriate author; in some cases a more recent version of the paper may have been published elsewhere.


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