Do Oil Heated Homes Increase or Decrease Home Value?

In the United Kingdom, many homeowners still rely on oil heating, especially in rural or off-grid areas. But when it comes to buying or selling a property, the type of heating system can impact its market value. This article explores whether oil-heated homes increase or decrease home value in the UK. We examine current market trends, buyer perceptions, running costs, environmental concerns, and future-proofing. For homeowners, estate agents, and buyers alike, understanding the implications of oil heating is essential for making informed decisions in today’s property market.

Introduction: The Importance of Heating Systems in Property Value

When buyers search for their next home, one factor often overlooked—until winter hits—is the type of heating system in place. In the UK, most properties are connected to the gas grid. However, approximately 1.5 million homes—predominantly in rural areas—still rely on oil heating. While oil heated homes is often efficient and effective, it can stir mixed opinions in the property market.

The big question is: does having an oil heating system increase or decrease your home’s value? The answer isn’t black and white. It depends on location, buyer preferences, energy costs, and growing environmental consciousness. Let’s dive into the factors that play a pivotal role in shaping the property value of oil-heated homes in the UK.

1. The Prevalence of Oil Heating in the UK

Oil heating is particularly common in remote or countryside areas where access to the gas network is limited. This includes parts of Wales, Scotland, Northern Ireland, and rural England—such as Cumbria, Devon, and Herefordshire. In these regions, oil heating isn’t seen as unusual; it’s the norm.

For buyers in these areas, oil-heated homes might not present a disadvantage. In fact, many prospective buyers are already familiar with how oil systems work and may prioritise other features like plot size, views, or potential for renovation.

2. Buyer Perception: Convenience vs. Complexity

When it comes to property value, buyer perception is everything.

Positives:

• Reliable and powerful: Oil heating provides high heat output, which is excellent for large or older properties with poor insulation.
• Off-grid independence: No reliance on gas suppliers gives some buyers a sense of energy freedom.
• Modernisation potential: Modern condensing oil boilers are efficient and more environmentally friendly than their older counterparts.

Negatives:

• Perceived inconvenience: Oil tanks need refilling, and some buyers see this as a hassle.
• Maintenance concerns: Older systems may require more upkeep, and oil prices can be volatile.
• Environmental worries: Oil is a fossil fuel. Buyers conscious of their carbon footprint might view oil heating as outdated or unsustainable.

In more urbanised areas, oil heating may reduce interest or limit buyer demand—potentially affecting the value negatively.

3. Cost of Running Oil Heating vs. Other Systems

Another crucial factor is the running cost of oil heating compared to alternatives like gas, electricity, or renewables.

• Oil prices fluctuate, often influenced by global markets. However, buying oil in bulk during summer can save costs.
• Oil boilers tend to have a longer lifespan than gas boilers and can be more efficient when well-maintained.
• According to the UK’s Energy Saving Trust, the average annual cost of heating a home with oil is comparable to LPG and cheaper than electric heating, although more expensive than mains gas.

For buyers doing their homework, a well-maintained, efficient oil heating system with a modern boiler might not be a drawback—especially in off-grid areas.

4. Environmental and Regulatory Factors

In recent years, the UK government has taken steps toward decarbonising home heating. With net-zero goals in place, fossil fuel systems like oil boilers have come under scrutiny.

• Future regulations may limit or ban new oil boiler installations (especially from 2026 onwards for new builds).
• This has led some buyers to question the long-term viability of oil heating and whether future upgrades will be required.

For this reason, oil-heated homes might face reduced value in the eyes of eco-conscious or forward-thinking buyers—unless the property also shows adaptability to renewable upgrades, like air-source heat pumps or solar panels.

5. Property Location Matters

Location is perhaps the most critical variable when determining if oil heating will impact a home’s value.

• Rural locations: Oil heating is widely accepted. The absence of a mains gas connection is the norm, so value impact is minimal—especially if the system is well-maintained.
• Urban or suburban settings: Oil heating can be a red flag. Buyers expect mains gas, and a property with oil heating may stand out for the wrong reasons. In these cases, oil heating could lower property appeal and result in a slight decrease in value.

Local estate agents often advise whether switching systems before selling is worth the investment, but this is highly case-specific.

6. Impact of a Modern Oil Heating System

If a home features an up-to-date oil boiler, well-insulated oil tank, and thermostatic controls, it reflects energy-conscious ownership. These features reassure buyers and potentially boost perceived value.

In contrast, a dated, inefficient system could prompt negotiation on asking price, particularly if the buyer anticipates immediate replacement costs.

Investing in system upgrades—like smart thermostats, tank monitors, or new condensing boilers—can improve marketability and neutralise buyer objections.

7. Market Trends and the Future of Oil Heating

Current property market trends show:

• A growing interest in low-carbon heating alternatives.
• Government grants (like the Boiler Upgrade Scheme) aimed at promoting heat pumps and renewables.
• Rising popularity of HVO fuel (Hydrotreated Vegetable Oil) as a low-carbon alternative to heating oil, which can sometimes be used with existing boilers.

Homeowners who can demonstrate future-proofing or the potential to convert to greener systems may maintain or even enhance their property’s value in the evolving market.

8. Tips for Homeowners with Oil Heating

To maintain or increase your home’s value:

• Upgrade your oil boiler to a modern condensing model.
• Install smart heating controls and thermostats to showcase energy efficiency.
• Service your system annually and keep maintenance records.
• Consider blending renewable energy, like solar panels or hybrid systems, for long-term appeal.
• Be transparent with buyers—share fuel usage costs, maintenance history, and potential for upgrades.

Conclusion: Does Oil Heating Increase or Decrease Home Value?

For UK homeowners, the effect of heating oil on property value depends on location, system condition, and buyer awareness. In rural areas, oil heating is accepted and usually doesn’t impact value negatively. In urban regions, however, it may be seen as a drawback unless the system is modern, efficient, and future-ready.

Ultimately, a well-maintained oil heating system isn’t likely to decrease your home’s value significantly. But with the UK’s ongoing energy transition, buyers may increasingly favour greener, more sustainable options.

Homeowners should consider small investments to improve efficiency and sustainability—not only for their comfort and savings but to maintain their property’s appeal and value in a shifting market.