Photo by Bill Mead on Unsplash

Introduction

Climate change is a topic that has been at the fore front of the media for the past few years. It is inevitable and if we look throughout the past few centuries, we can see the changes that are occurring in our climate. Therefore, the governments of the world are committed to tackling climate change and move towards green energy. This way Earth will be habitable for future generations. We see talks of “net zero” and greener energy and this will have an affect on all of us. These changes will affect the cars we drive, the way we live and our housing.

But what will these new measures mean for homeowners or those looking to get on the property ladder? Will we need to save more money as prices rise? In this article we will answer those questions. We will lay out the key changes and their costings for the future of the property industry.

The Stage of Infancy

One of the main issues with people moving over to greener energy is that its still in its early stages. In August 2021 the Energy Secretary, Kwasi Kwarteng, said that the greener heat pumps don’t work very well. They also don’t work as well as their gas boiler counterpart because green energy is still in its infancy. He then stated that with more investment it will be able to catch up. However, the government are still going along with its banning of gas boilers in new builds by 2025.

But what will this mean for people living in older homes? Well, it is expected that ALL gas boilers will eventually be banned between 2035 and 2050. This will mean that homeowners will need to buy newer and greener alternatives. But with them not being a viable alternative it makes homeowners think, is it worth it?

The Cost of Green Energy

Another issue with greener technology is that because its new and not the dominant version, it makes it more expensive. This can also be seen in relation to cars. The Tesla is the only car company to make just electric cars. Whilst other companies do make some electric cars, its only ever one model, they still focus on petrol/diesel cars. Because Tesla is the only one it makes them more expensive. This is because whilst the demand is expected to be great, there simply isn’t the supply. We see the same with regards to housing.

Whilst there are varying alternatives to gas boilers as mentioned earlier, they’re in the early stages of development. Ground source heat pumps, whilst greener, can cost up to a whopping £19,000. Heating via solar panels can cost up to £5000 but these can be temperamental especially during winter and the lack of sun. Air source heat pumps average at around £11,000 in cost and finally a biomass boiler can range from £5000 to £19,000.

These prices may go down in the next decade when more and more companies start developing their own alternatives. However, if not then this is either going to be a massive financial blow or simply unaffordable to many homeowners. Considering that a standard gas boiler costs roughly £1500, asking people to then pay £19,000 for a greener alternative will not sit well with a lot of working-class families. Faced with the choice of a green alternative or a gas boiler, most people will go for the gas boiler as its far cheaper and currently, better.

The Landlords

In early November 2021 a new government measure was revealed that would affect all landlords across the UK. Under the government plans of reaching net zero, the new rules will ban landlords form letting out their properties unless they are made more energy efficient. The average cost of making their properties more energy efficient is estimated to be £5000 per property.

If we look at this from a business perspective, the landlords are going to want to make back that £5000 they would’ve lost to make the property more energy efficient. So how will they do that? The likelihood is that the rent of these properties will increase to make up for the loss. So, this new government measure will affect ordinary people renting more then it will landlords as they will have to pay more in their monthly rent.

Is It Green Energy Worth It?

These are the main changes that we know of so far that are part of the government’s net zero plan. As we look at it in 2021 from what we can see it’s going to be more expensive for a worse product. But with the governments aim of net zero is 2050, the main question now is what will happen in that time? Are costs going to go down as the supply in greener alternatives grows? Will we switch more to nuclear energy instead? Will we have a referendum on net zero like in Switzerland?

Only time will tell as to what will happen and now it is difficult to predict what will happen. We must consider that from now to 2050, governments and policy will change so several different things could happen. Each person will have their own opinion on the idea of net zero and green energy. All we can do is observe and hope that it doesn’t become financially difficult for homeowners in the near future.

Credibble offers two fabulous solutions.

If you’re preparing to take a mortgage, never apply until you’ve tried our unique and FREE Credibble Home app. Our smart technology will tell you what you need to fix so you avoid rejection. The app predicts when you will be able to buy, for how much and tracks your month-by-month progress to mortgage success. We’ve even added your own mortgage broker, so you get the best deals available.

More focused on your credit rating? Well, get started for free with Credibble’s 24- Factor Credit Check to truly help you improve your creditworthiness and how lenders view you. (Remember: lenders don’t use your credit score! We’ll show you what lenders look for and how to get your credit report in the best shape possible).

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