Favorable energy label counts more and more for owner-occupied home

Suppose you raise the energy label of your house with all kinds of sustainability measures, for example from a G-label to a C-label. This makes it worth an average of 35,000 euros more on the owner-occupied housing market, while that until the beginning of this year was still an average of 25,000 euros used to be. Brainbay, the data subsidiary of real estate association NVM, calculated this. The explanation for the increasing difference between well-insulated and outdated homes is clear: the sharp rise in energy prices.

Is the interest in the often drafty 1930s homes now also waning? You would expect it if you look at the NVM figures. In this, value development keeps pace with the label. For example, a home with a C-label currently yields an average of 7.9 percent more than a home with a G-label, while an A-label yields 13.3 percent more.

However, for this calculation, homes that are comparable, for example by construction period and location, have been compared against each other. This makes the NVM overview especially useful if you want to know how much more your house will be worth if you invest in sustainability.

A little more insight into buyers’ interest in older homes offers a recent research from PriceHubble, a Swiss agency that analyzes real estate data. The researchers lumped together all the Dutch homes sold and then mapped the square meter prices per energy label. This shows that 1930s houses still receive a considerable premium on the owner-occupied market. Most of them have an F or G label and are still worth more than many homes with a higher energy label. That is about 3 percent less than houses with an E or D label (mostly from the 1950s), and even more than 8 percent with a C label.

First residents

This is probably because the majority of the C-category homes date from the not very popular 1960s and 1970s, suspects Gerard van Tilburg, director of PriceHubble in the Netherlands. “In addition, these houses are often still sold by the first residents and a lot has to be done, such as removing asbestos.”

The question is whether home buyers will continue to turn a blind eye to those fine 1930s houses. According to Tilburg professor of real estate economics Dirk Brounen, the energy label will only weigh more heavily in the decision in the coming period. He also expects the same for the popular categories of houses. “There is a bit more sense in the bidding process now that mortgage rates and energy prices are rising. You can be in love with a house from the thirties, but I notice that people are starting to think more and more about an F-label.”

Now that competition among buyers is diminishing, there is a realization that it is not just about monthly mortgage payments, but that energy costs also count.

Carola de Groot Rabobank

The cautious cooling of the housing market also plays a role, according to housing market economist Carola de Groot of Rabobank. “Until now you see that the effect of the energy label is also smaller in the large cities, because the tension in the housing market cycled through it. You were already happy that you had found a home. Now that competition among buyers is diminishing, it is realized that it is not just about the monthly mortgage payments, but that the energy costs for a new house also count strongly.”

If you buy an old house with a low energy label, you have to get to work – and not everyone is in the mood for that. In the long run, it will even become mandatory, Dirk Brounen predicts. “In the autumn of 2021, a memorandum from Brussels was leaked about mandatory maximum limits for the energy consumption of an owner-occupied home. That obligation will come, I am convinced of that. From 2030, housing associations may only rent out homes with a D label or higher, which is a harbinger.”

Insulating a 1930s house is often more complicated and more expensive than some newer houses, says Suzanne Hoogers of the Milieu Centraal information organization. For example, houses from 1920 have cavity walls, but the open space is sometimes less than 4 centimeters. That is too narrow for most insulating materials. According to Hoogers, this can still be compensated for in a terraced house with insulating glass, floor and roof insulation. But with a semi-detached house or a detached house you would have to work with retaining walls. Floor insulation also requires an accessible crawl space, with a height of at least 35 centimetres, which is sometimes missing. Furthermore, 1930s houses with metal frames are unsuitable for high-quality insulating glass, which is too thick. Special vacuum glass is an alternative, but according to Hoogers it is a lot more expensive. If the house falls under a protected village or cityscape, you are bound by all kinds of rules, and the installation of solar panels or a heat pump can become difficult, as can replacement of window frames or insulation of exterior walls.

advance

If these interventions are possible, then according to sustainability expert Maarten Eeke van der Veen of interest group Vereniging Eigen Huis (VEH) a few more challenges. For example, you can get a government subsidy for sustainability measures, but you can only apply for it after the job has been completed. Van der Veen: „So you have to advance the entire investment. We notice that a large group of people gets stuck there.”

Another practical problem that Van der Veen mentions: the scarcity of contractors, builders, installers and building materials. “If you think about a heat pump now, you are actually too late for the heating season.”

For professor Brounen, who is considering a move with his wife, these are all reasons to look for a house with a somewhat higher energy label. In recent years, he raised his own sixties home to a C-label with solar panels and insulation of cavity walls and roof. “I really wouldn’t want to go back to F now.”