Why House Buyers Should Choose ‘Green’ Homes

The Good Trade recently published an article on some of the best eco-friendly homes that have ever been built. Homes like these have been inspirational to other people that want to live in a green home.

With some governments offering homeowners financial incentives to improve the energy efficiency of their house in the face of the climate emergency, it can be tempting for house buyers to choose properties with lower home energy efficiency ratings—which tend to have a lower asking price—and then carry out renovation works to increase the energy efficiency of their house. This strategy, however, can often prove much more expensive in the long run than investing in a highly energy-efficient property.

If you are trying to convince investors of the commercial viability of building green homes and selling them at a later date, here are some factors that you and your company might want to suggest as a marketing focus.

Older buildings are more likely to have structural issues

During the post-war economic boom and ‘baby boom’ of the 1950s and 1960s, an expanding urban and suburban population meant that houses were built cheaply and with a focus on quantity rather than quality. Several decades later, these properties are likely to have developed mold and any number of structural issues. A newly built house is going to be both ‘greener’ and more structurally sound, which means that ongoing repair costs and heating bills are going to be much lower, especially given the recent hike in gas prices.

Mortgage rates might be better for green homes

There has been some research suggesting that mortgage providers might consider owners of less energy-efficient houses at higher risk of defaulting on their payments because of the high ongoing costs of keeping those properties heated and structurally safe. It is likely, therefore, that lenders will offer more attractive mortgage rates to those purchasing greener properties.

Another reason why it might make more financial sense to invest in an energy-efficient house with a higher asking price than to buy a cheaper, less energy-efficient fixer-upper is the issue of simple vs compound interest. Mortgages normally accrue simple interest, which means that the borrower will know exactly, at the point of borrowing, how much money they are going to need to pay back to the lender over the specified period. However, if the repair costs end up exceeding the homeowner’s initial budget (which they always do!), then the buyer might need to resort to borrowing more money through credit cards or other types of loans that accrue compound interest. This will bump up the total cost of buying and repairing an older, less ‘green’ house considerably.

“Building works never end!”

Finally, it’s a well-known fact in the building industry that clients tend to underestimate the duration of building projects and, as a consequence, the costs involved. Unless the house buyer has huge amounts of time, money, and energy at their disposal, they will probably end up regretting choosing to undertake major works such as improving the insulation in their home rather than purchasing an already well-insulated property. Tom Cargill’s witty “ninety-ninety rule” refers to coding, but it may as well have been said about building works: “The first 90 percent of the code accounts for the first 90 percent of the development time. The remaining 10 percent of the code accounts for the other 90 percent of the development time.”