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'The Capitalisation Rate of Energy Efficiency Improvements in the Housing Market: A Micro-Level Analysis for England and Wales' Miriam Steurer (University of Graz)

We match Energy Performance Certificates (EPCs) with Land Registry data to create a micro-level dataset for England and Wales on residential transaction prices and property characteristics. In addition to current energy efficiency, our merged dataset includes recommended energy improvements and estimated costs. We develop a hedonic model to predict the impact of proposed energy improvements on the price of each property. In this way, we can examine how private incentives to make energy improvements vary by region and property type. In particular, we can establish for which properties energy improvements could be recovered by higher property values.
Additionally, we estimate the cost of reaching a Level C energy rating for properties with ratings currently below this level. Again, we compare the energy improvement costs with their expected impact on property prices. Our results could help design more cost-effective government subsidy schemes to reach the UK’s Net Zero carbon emissions target by 2050.

Mar 23, 2023 12:30 PM in London