This month, we’re exploring how energy efficiency impacts property value and what you can do about improving energy efficiency in your home.
If you have bought or sold a house in the past sixteen years, you will likely have come across the Energy Performance Certificate or EPC. The EPC was introduced in 2007 to show a property’s energy efficiency. An ‘A’ rating defines a highly energy-efficient property, while a ‘G’ indicates that your home needs significant improvement. Your home’s energy efficiency rating probably falls in the middle of that scale.
A rating of ‘D’ – the UK average – used to be good enough, but things are changing. These days, low energy efficiency can be a deal breaker when you are selling or renting out a property.
The importance of energy efficiency
Global warming has featured in the news more than ever this year. From holidays to heating bills, the effects of climate change are impacting every aspect of our lives. Whether you are selling your house, buying a new home or letting, ensuring that your property is as energy efficient as possible is essential.
The cost of living crisis has emphasised the need to save as much energy as possible around the home. With the price of gas and electricity now at record levels, most people looking to rent or buy a property are keen to know what to expect from their energy bills. If you plan to sell or let, the EPC rating will be an important part of the decision-making process for prospective buyers or tenants.
Who can carry out an EPC inspection, and what does the certificate show?
The EPC survey must be carried out by an accredited Domestic Energy Assessor (DEA), and it is valid for ten years. The assessor will check out your property carefully, taking note of factors such as room dimensions, heating and lighting systems and even construction materials. When calculating your rating, the assessor will consider anything that helps save energy, such as double glazed windows, roof insulation or solar panels.
There are two key pieces of information included in the EPC. One is an energy efficiency rating (highlighting your property’s overall use of energy), and the other is an environmental impact rating, which tells you how much carbon your home is releasing into the atmosphere. But your EPC doesn’t just contain information about your property’s energy use and carbon footprint. It also tells you how you can save money by reducing energy costs.
What effect do energy efficiency ratings have on property value?
Simple jobs, such as insulating the loft of a 4 bedroom home, will cost around £1,250 and could help to improve your EPC rating.
A recent survey of 30,000 homes revealed that properties that moved up just one EPC band increased their value by 3 per cent (based on average UK property prices). Homeowners who upped their house’s EPC ratings from ‘F’ or ‘G’ to ‘C’ saw a value increase of 19 per cent.
If your property rates as ‘F’ or below on the energy efficiency scale, it will be illegal to let or sell it, as those ratings are below the government’s Minimum Energy Efficiency Standards (MEES).
Nationwide estimates that taking all the measures needed to reach a ‘C’ rating from ‘F’ or ‘G’ could cost a homeowner more than £25,000. However, once the property has been upgraded, the owner or tenant could save approximately £1,800 a year on energy bills.
Will new EPC rules affect landlords?
Landlords can rent a property with an EPC rating of ‘E’. However, the rules will change to ‘C’ under new legislation currently progressing through parliament. After initially proposing a start date of April 2025 for this rule change, Housing Secretary Michael Gove has recently suggested the date could be pushed back to 2028.Should I take steps to improve energy conservation?
Energy efficiency’s impact on the property market shouldn’t be underestimated. Given the increasing demand for energy-efficient homes, properties with a negative EPC rating may prove harder to sell in future.
Here are some of the steps you can take to reduce energy consumption around the home:
- Loft insulation
- Wall insulation
- Boiler replacement
- Solar panels
- Double glazing
Adopt some of these measures, and you will not only feel you are doing your bit to help the planet, but you’ll also enjoy living in a warmer, draft-free home with cheaper energy bills. Even better, you could add real value to your home.
If you need further help or advice when buying, selling or letting a property, our Barkingside and Ilford estate agents are always ready to help. Why not give us a call to discuss your plans?
Give us a call at 0203 972 7341 or email info@oaklandestates.co.uk.
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