According to new research from the Mortgage Advice Bureau, a fifth of Brits (19%) wouldn’t consider a house with an EPC of below grade C, and 46% of potential buyers would rather have good insulation than a bigger garden (29%).
Potential buyers said their desire to reduce their energy bills was a key reason why many would only consider a home with an optimum EPC rating.
Mortgage Advice Bureau head of lending Brian Murphy said that more homeowners need to understand EPC ratings and their significance.
A higher EPC rating could lead to a cheaper mortgage rate
“Our research found that two-thirds (60%) of homeowners didn’t know what their EPC rating was when asked. This is something that is important and can easily be rectified. Knowing your EPC rating isn’t only worthwhile when considering selling or buying, it’s also good to know so that you can plan upgrades to your home accordingly.”
Murphy adds: “What many might not know is that in buying a higher rated property, you could also become eligible for a green mortgage, a specialist mortgage for someone with an environmentally friendly home. This means that not only will you get a discount on energy bills, you could also lock in a cheaper mortgage rate.”
Government aspires to minimum C rating by 2025
Having an optimum EPC rating is also likely to become much more significant for landlords, with Property Industry Eye noting that while landlords are currently able to let homes which have an EPC rating of E and above, the government standards are widely expected to become tougher. The government has previously set out an aspiration for a minimum C rating in England and Wales by April 2025. Future legislation could see landlords unable to take on new tenants or face fines if they fail to comply with the changes.
Property Industry Eye quoted Emma Cox, MD of Real Estate at Shawbrook, who said: “Landlords are already grappling with a volatile housing market so it’s vital that they are planning ahead where possible. The government has made clear its aspirations for net zero buildings and every homeowner and property investor in the UK will have a role to play in getting us to this goal. However, while many landlords have done their homework and know of the current EPC proposals there is still a huge amount of uncertainty.
“While some in the industry are waiting for a confirmation from the government or direction on the timings of the proposals, others are already taking action to make their properties more sustainable. “The fear is with materials and service costs going up, improvement work could become increasingly expensive as the proposed 2025 deadline comes closer.”
Echoing Emma Cox’s concerns about the likely cost of making properties more energy efficient over the coming years, PBC Today says: “Retrofitting UK homes could cost £156bn to reach future regulations.”
They add: “Analysis by Outra has shown that over 19m homes in the UK have an EPC rating of D or lower and that retrofitting UK homes could cost up to £156bn.”
Advantage’s view: With a property’s EPC rating becoming increasingly significant whether you’re planning to sell, rent out, or live in a property, and with the cost of materials and labour likely to rise over the next three years, a case can certainly be made for acting sooner, rather than later, to begin planning energy efficiency updates.