Homeowners could reduce their annual energy bills by more than £2,000 by combining targeted home improvements with simple efficiency measures, according to new analysis published to coincide with Energy Savers Week.
Research by the mortgage adviser Alexander Hall suggests that a mix of insulation, heating upgrades and behavioural changes can significantly lower household running costs, while also improving access to so-called green mortgage products that reward energy-efficient homes.
Energy Savers Week, led by the Energy Saving Trust, is a national campaign encouraging households to cut energy use through practical upgrades and everyday changes, amid continued pressure on household finances.
Alexander Hall analysed the financial impact of seven common home improvements and found that, taken together, they could save the average household around £1,675 a year on energy bills.
ENERGY SAVING
The largest single saving comes from cavity wall insulation, which can cut annual costs by about £470. Loft insulation follows at £260, while upgrading to a more efficient boiler or installing solar panels typically saves around £270 a year.
Smaller but still meaningful reductions come from installing a smart thermostat, saving around £175 annually, replacing windows with double glazing, saving £140, and switching to LED lighting throughout the home, which can cut bills by about £90 a year.
The analysis also examined how quickly each improvement pays for itself. Smart thermostats and LED lighting offer the fastest returns, with typical payback periods of less than two years.
Loft insulation and cavity wall insulation generally recover their costs within four to five years, while boilers and solar panels are longer-term investments, taking more than a decade to break even. Double glazing offers the slowest payback, at close to 27 years based on energy savings alone.
Alongside physical upgrades, the Energy Saving Trust estimates that simple, low-cost actions such as draught-proofing, reducing tumble dryer use, switching appliances off standby and taking shorter showers can save households a further £350 a year.
MORTGAGE AFFORDABILITY
Beyond lower energy bills, improving a property’s efficiency can also strengthen mortgage affordability.
Many lenders now offer green mortgage products for homes with higher energy performance certificate (EPC) ratings, typically A or B, providing incentives such as lower interest rates, cashback or enhanced borrowing capacity.
There are now close to 50 UK lenders offering some form of green mortgage proposition. Leeds Building Society, for example, allows higher borrowing for buyers of energy-efficient homes, while Lloyds Banking Group’s Green Living Reward scheme has paid more than £1 million in cashback to customers making qualifying improvements.
WORTHWHILE INVESTMENT
Richard Merrett, Managing Director of Alexander Hall and chair of the Green Mortgage Advice Initiative, says: “Energy Savers Week helps to highlight how even relatively small changes can add up to meaningful savings over time and, whilst some of the more extensive home improvements may take longer to pay for themselves, they all make for worthwhile investments in the long term.
“What many homeowners don’t realise is that improving a property’s energy efficiency can also have a positive impact on mortgage affordability.”
ADDED BENEFIT
He adds: “With green mortgages now more widely available, lenders are increasingly rewarding energy-efficient homes with incentives such as enhanced borrowing capacity, lower interest rates or cashback.
“This means homeowners can benefit twice over, reducing their ongoing energy bills while also improving the cost and flexibility of their mortgage.”
