Sustainability and property value: how the energy rating affects your home’s valuation

Sustainability is playing an increasingly important role in the housing market. But what does that actually mean for property valuations? In this article, we explain how sustainability measures, energy ratings and local developments can influence a property’s value.

In addition to factors such as location, floor area and state of repair, the energy performance of a property is now increasingly taken into account. Sustainability is therefore routinely included in the valuation of a property.

Sustainability measures can have three key effects on a property: they help protect its value, increase its appeal to buyers and can reduce energy costs. As a result, sustainability is playing an increasingly important role in determining a property’s market value.

The energy label and its impact on property value
The energy label is a key factor in assessing a property’s energy efficiency. This label indicates how energy-efficient a property is, ranging from label G (least energy-efficient) to A++++ (highly energy-efficient).

Research by the Land Registry shows that properties with energy labels A, B and C have steadily increased in value in recent years. Properties with less favourable labels, such as F and G, are more likely to lag behind in price trends and, in some cases, have actually fallen in value.

Research by Brainbay (NVM) also shows that the energy label is having an increasing influence on property value. For example, an improvement from energy label D to A can result in an average increase in value of around 8.6%. An improvement from C to A also shows an average increase in value of over 5%.

As a result, the difference in property value between energy-efficient and less energy-efficient homes is growing. Energy-efficient homes are also sold more quickly and more often for above the asking price.

These figures are based on averages from research. The impact on the value of an individual property may vary.

Energy-efficiency measures and their impact on a valuation
When valuing a property, a valuer considers various factors that may influence the property’s energy performance. These include, for example:
- insulation of the roof, floor and walls
- HR++ or triple glazing
- solar panels
- energy-efficient systems such as a heat pump
- energy-efficient ventilation systems

These measures contribute to a property’s energy performance and are therefore taken into account during a valuation.

Differences between properties and regions
The impact of sustainability improvements on property value can vary depending on the type of property and the region. Flats sometimes benefit less from individual measures, for example because facades or roofs are often jointly owned. In many cases, larger properties, on the other hand, show a stronger increase in value as a result of sustainability improvements.

Regional differences are also apparent. In tight housing markets, such as in the Randstad, the difference between energy-efficient and less energy-efficient homes is often more pronounced than in regions where the housing market is less tight. Research shows, for instance, that homes with a poor energy rating in large cities often experience the sharpest fall in value.

The importance of local market knowledge in a valuation
The impact of sustainability measures on a property’s value is also linked to the local housing market. That is why it is important for a valuer to be thoroughly familiar with the region in which the property is located. Local market knowledge helps in assessing the property’s value and in producing a well-founded valuation.

Local sustainability plans drawn up by local authorities play a role in this. Every local authority draws up a Heat Transition Vision setting out how neighborhoods will move away from natural gas in the future. Many local authorities are working towards a situation where homes will be natural gas-free by around 2040.

Neighborhood implementation plans have already been drawn up for various neighborhoods. These specify, for example, which neighborhoods can switch to a particular heat source, such as a district heating network, an all-electric heat pump, a hybrid heat pump solution or other sustainable heating systems.

These developments may influence future investments in properties and, consequently, their valuation.

The role of sustainability in the housing market is set to grow even further in the coming years. Factors such as the energy performance certificate, insulation and sustainable systems are playing an increasingly important role in the valuation of a property and the determination of its market value. For homeowners, investing in sustainability can therefore not only lead to lower energy costs, but also contribute to the property’s appeal and future-proofing in the housing market.

Need a valuation in the Haarlem, Amsterdam or Amstelveen area?
Are you looking for a valuation of your property in the Haarlem, Amsterdam or Amstelveen area? Then you can arrange a valuation through Koops Makelaardij.