Energy performance ratings and house prices in Wales: an empirical study

Fuerst, F., McAllister, P., Nanda, A. and Wyatt, P. ORCID: https://orcid.org/0000-0002-9091-2729 (2016) Energy performance ratings and house prices in Wales: an empirical study. Energy Policy, 92. pp. 20-33. ISSN 0301-4215 doi: 10.1016/j.enpol.2016.01.024

Abstract/Summary

This paper investigates the effect of Energy Performance Certificate (EPC) ratings on residential prices in Wales. Drawing on a sample of approximately 192,000 transactions, the capitalisation of energy efficiency ratings into house prices is investigated using two approaches. The first adopts a cross-sectional framework to investigate the effect of EPC rating on price. The second approach applies a repeat-sales methodology to investigate the impact of EPC rating on house price appreciation. Statistically significant positive price premiums are estimated for dwellings in EPC bands A/B (12.8%) and C (3.5%) compared to houses in band D. For dwellings in band E (−3.6%) and F (−6.5%) there are statistically significant discounts. Such effects may not be the result of energy performance alone. In addition to energy cost differences, the price effect may be due to additional benefits of energy efficient features. An analysis of the private rental segment reveals that, in contrast to the general market, low-EPC rated dwellings were not traded at a significant discount. This suggests different implicit prices of potential energy savings for landlords and owner-occupiers.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/52307
Item Type	Article
Refereed	Yes
Divisions	Henley Business School > Real Estate and Planning
Publisher	Elsevier
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