Cut Stamp Duty for more energy efficient homes

A think tank by Policy Exchange has highlighted that home buyers might be encouraged to buy more energy efficient properties if the amount of stamp duty was directly linked to the energy grading of the home.

The report said the UK has some of the least efficient housing stock and the highest rates of fuel poverty. Previous schemes such as the Green Deal have failed to encourage households to become more energy efficient. Green Deal loans were only taken up by 16,000 households against the original proposal that it would support millions.

The report has called for energy efficiency to be treated as part of a fuller picture and not in isolation. If it is embedded in the housing market and in turn housing prices, it will promote wider uptake. Two separate proposals were offered:

1. Linking stamp duty to energy performance to create an incentive to purchase a more energy efficient home.

2. Reforming mortgage affordability tests to better reflect the energy performance of a property and encourage lenders to offer energy efficiency mortgages.