By promoting energy efficiency in homes, the think tank’s report argues energy bills could be reduced while cutting carbon emissions in one of the cheapest ways possible.
The report suggests that by embedding energy efficiency into the housing market and house prices, more homebuyers would be encouraged to purchase energy efficient homes.
Policies that could support think include linking Stamp Duty to energy performance, reforming mortgage affordability tests and encouraging lenders to offer energy efficiency mortgages, the report said.
The Policy Exchange also suggested that a Stamp Duty relief could apply if energy efficiency improvements are made to a property within 12 months from the point of purchase.
The reforms should be gradually phased in with the adjustment to Stamp Duty no more or less than £2,500, regardless of property value, it added.
Richard Howard, author of the report, said: “Improving home energy efficiency can save households money, as well as substantially reducing their carbon emissions. Policies which link property values more closely to energy performance could kick start an energy efficiency revolution in this country.
“By reducing the transaction costs and increasing the mortgage available for a more energy efficient home, the government could nudge people into making improvements to the efficiency of their home, which would not only add a premium to their property but would also reduce their energy bills.”
