Heat is the opposite of a flood: no dated event, no map of the damage, just a slow warming that a household is tempted to discount because next year might be cooler. For the market to steer adaptation, prices would have to reward heat-resilient housing. This paper asks whether they do, using 13.8 million listings from 2018 to 2025 linked to the Energy Performance Certificate register and to Met Office grid temperature.
What the price signals say
Cooling is barely advertised. Air conditioning appears in about a twentieth of one percent of sale listings and a tenth of one percent of rentals, and although the share edges up over the decade it does not jump after a heatwave. The feature that would most obviously mark a heat-ready home is almost invisible in the market.
The energy label rewards the wrong season. The premium paid for a high-efficiency (A to C) home peaks in November to January and is close to zero across the year for sales: the certificate is a winter instrument, a promise of a warm cheap-to-heat house, not a cool one. Acute heat does nothing to it, and the two hottest spells of the period, July 2018 and July 2022, leave the premium unmoved.
Where heat is priced, it is priced into the right attribute and only slowly. In places whose summers have warmed the most, the air-conditioning premium is larger, by about two percent for every extra degree of summer warming, while the energy-label premium does not respond to heat at all. The market rewards actual cooling capacity, not the certificate, and it responds to the chronic trend rather than to the salient event. The band label is also priced a little beyond its underlying score, and that extra tracks heat only in the rental market.
The result is an adaptation gap: the signals that would push households toward heat-resilient housing are faint, mis-aimed at the winter, and slow. The market is not blind to heat, but what it sees, it barely says.
Headline estimates
| Margin | Finding | Reads as |
|---|---|---|
| Cooling in listing text | Air conditioning in about 0.05% of sales, 0.11% of rentals; no jump after heatwaves | Heat-readiness is almost never advertised |
| Seasonal energy-label premium | High-EPC premium peaks in winter; unmoved by the 2018 and 2022 heatwaves | The label rewards warmth, not summer resilience |
| Chronic heat | Air-conditioning premium about +2% per degree of summer warming; label premium unresponsive | Heat is capitalised into cooling, and only slowly |
| Band label beyond score | Priced above the score, tracking heat only in rentals | A weak, tenure-specific signal |
Estimates come from rolling cross-sectional hedonics and a seasonal profile, an interrupted time series around the two heatwaves, a local-authority heat difference-in-differences on grid temperature, and an energy-band boundary regression discontinuity. See the data and methods for definitions, sources, and the full descriptive statistics.