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Does energy efficiency matter to home-buyers? An investigation of EPC ratings and transaction prices in England

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McAllister, P 
Nanda, A 
Wyatt, P 


This paper investigates whether energy performance ratings, as measured by mandatory Energy Performance Certificates (EPCs), are reflected in the sale prices of residential properties. This is the first large-scale empirical study of this topic in England involving 333,095 dwellings sold at least twice in the period from 1995 to 2012. Applying hedonic regression and an augmented repeat sales regression, we find a positive relationship between the energy efficiency rating of a dwelling and the transaction price per square metre. The price effects of superior energy performance tend to be higher for terraced dwellings and flats compared to detached and semi-detached dwellings. The evidence is less clear-cut for rates of house price growth but remains supportive of a positive association. Overall, the results of this study suggest that energy efficiency labels have a measurable and significant impact on house prices in England.



Energy efficiency, House price, Hedonic model, Repeat sales model

Journal Title

Energy Economics

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Elsevier BV
The authors wish to thank the UK Department of Energy and Climate Change (TRN 297/11/2011) for financial support. Helpful comments on earlier drafts were received from Chris Nicholls, Jeremy Moody and two anonymous referees of this Journal. Franz Fuerst also wishes to acknowledge the generous support of the Cambridge University Land Society (CULS) in enabling his research.