Is retrofitting your home worth the money? Many people may be more concerned about the cost of it all and the payback it delivers than the environmental benefits.
If you can afford to do it, investing in a retrofit could leave you quids in, data published last month shows. Energy-efficient homes sell for more than €100,000 more, according to data technology company Geowox, which specialises in home valuations.
Homes with an A or B energy rating achieved a median sale price of €445,000 compared with €340,000 for less energy-efficient homes, according to the data for the first quarter of this year.
The energy-based comparison includes all entries in the Irish residential property price register in the period, but excludes new homes to gain a more precise understanding of the energy-efficiency premium.
Energy-efficient homes commanded a 30.8 per cent sales premium, with growing demand of 15.7 per cent. That kind of uplift to the value of your home is pretty decent. Bringing your home up to an A or B rating can be pricey, however, so you’ll want to know the benefits to you are worth the cost.
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Insulating your home, making it airtight, installing a heat pump and new windows and doors, for example, can cost anywhere between €25,000 to €75,000, depending on factors including the size of your home, whether it’s terraced or detached, and what general condition it’s in.
Sustainable Energy Authority of Ireland (SEAI) grants can cover up to 50 per cent of the cost, but you’ll have to pay the rest. That’s a lot of money, even if it does add value to your home in the long run.
The SEAI Home Energy Upgrade Loan Scheme offers rates through the main banks of about 3 per cent. This type of Government-backed loan offers a far more competitive rate than a regular home improvement loan. It enables those availing of SEAI grants in order to improve the Ber rating of their home to borrow between €5,000 and €75,000 over one to 10 years.
The money is unsecured – which means, unlike as with a mortgage, the lender has no security, such as your home, against the loan. The loan must be used for retrofit works only, which must be carried out by an SEAI-registered provider.
Bank of Ireland is offering this Home Energy Upgrade Loan at a variable rate of 3 per cent annual percentage rate (APR). A loan of €20,000 over five years with that bank will mean monthly instalments of about €360. The total cost of the credit is €1,532.20.
Seven credit unions dotted around the country have been approved to offer these loans too, at rates from 2.9 per cent, depending on the lender.
So what about the payback? Factors such as better attic and wall insulation and less draughty windows and doors mean your house is going to lose less heat, and what heat it does retain it will do for longer.
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A more energy-efficient home and heating system will be cheaper to run too, so you’ll save on your utility bills. A retrofit is unlikely to save you €360 a month on utility bills, the loan repayment in my example – but it can save you some money, and your home will be warmer and more comfortable at the same time.
So, you don’t have to sell your house to feel the benefits of retrofitting, but if you do sell, your house should achieve a 30 per cent higher value than a neighbour who didn’t retrofit, according to the Geowox data. That advantage will certainly help some householders warm up to the idea of retrofitting.
