Energy efficiency and green homes are perks homebuyers are looking for as the energy market is showing signs of high volatility, but experts have warned that these upgrades won't push the same emotional buttons as a kitchen or bath upgrade.
When it comes to heating and cooling efficiency, a heat pump is a great choice. However, a heat pump is unlikely to boost a home's resale price by the same amount it costs to install.
Still, it may give sellers an edge by making the property more attractive to buyers who are looking at the cost of running the home rather than just the purchase price.
What's happening?
More households are weighing heat pumps as they look to use less gas, reduce pollution, and deal with higher energy costs. However, experts quoted by The Independent said people should be cautious about assuming the upgrade will produce an equal rise in resale value.
Part of the challenge is the upfront cost. A new gas boiler can cost around £2,000 ($2,600) to £3,000 ($4,000) to replace, while a professionally fitted heat pump is typically about £8,000 ($10,700) to £15,000 ($20,000).
Paul Broadhead, head of mortgage and housing policy at the Building Societies Association, said buyers are thinking differently as energy prices remain a concern.
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"What the volatility in energy prices has really focused people on is how much a property is going to cost to run," he said.
So while a heat pump may not return its full installation cost through a higher sale price, experts said it can help an efficient home stand out and potentially sell more quickly.
In the U.K., there is a new policy that might move the needle on that equation. Eligible households can get up to £7,500 through the government's Boiler Upgrade Scheme, but many families still face a much bigger initial expense.
Why does it matter?
The financial case for a heat pump needs to include the cost to run over time, not just the purchase price, and it's not only about the home's resale value.
In the right home, these systems can produce around three units of heat for every unit of electricity they use, which may cut energy bills, especially when combined with off-peak tariffs or solar panels, according to The Independent.
Energy Performance Certificate ratings are also drawing more attention from buyers, which can make overall efficiency more important. Rightmove found that a typical home rated A might see about £65 added to annual bills, compared with £205 for a C-rated home and £284 for a D-rated one. More than half of homes on the market have a D rating.
Experts also stressed that a heat pump is not suitable for every property. Elliott Anderson-Evans, an RICS surveyor and co-founder of Elliot & Hill, said, "You have to look at the whole house. Installing a heat pump in the wrong property could be money wasted if the home isn't insulated well enough for it to work efficiently."
What can I do?
Anyone considering a heat pump should start by assessing the home as a whole rather than focusing only on the unit. Looking at insulation, window quality, and overall efficiency can help show whether the change is likely to bring the comfort and savings you want.
Anderson-Evans said, "If you're in your forever home, installing a heat pump makes sense. But if you're only expecting to be there for another three or four years, it might not stack up financially."
Broadhead said consumers need access to trusted guidance and accredited installers. Fergus Mitchell, founder of Property Search Co, said, "We need the right training, expertise and accredited firms in place to ensure the right systems are installed in the right homes."
For people planning to sell, that may mean keeping the paperwork, updating the home's energy certificate after improvements, and describing the heat pump as part of an efficiency package instead of as a guaranteed way to raise the asking price.
Broadhead said, "A heat pump won't necessarily add its installation cost to your home's value, but it can make the property more appealing and easier to sell."
In a slower market, he added, "anything that sets you apart in that market will enhance your prospects of achieving a speedier sale."
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