A recent house price index report published by Nationwide BS suggest that right now the EPC (Energy Performance Certificate) rating on your home is not affecting house values too much despite the governments push for greener homes. Their research suggests that compared to an EPC rating of ‘D’ the price difference is small.

• Homes with an EPC rate of A or B can attract a premium of 1.7% in the value of the home.
• Home rated F or G can attract a reduction of 3.5% in the value of the home

The report further comments that if the UK is to meet it’s 2050 emissions targets it is vital that homes are decarbonised.  Energy efficiency in the UK is getting better in the UK housing stock, mainly caused by new build developments and improvements carried out by homeowners on work such as loft insulation and cavity wall insulation. This has caused an uplift of 26% of housing stock being rated ‘C’ or above in the 10 years from 2009 to 2019.  However, over 60% of UK homes are still rated ‘D’ or below.

New homes is where the biggest percentage of homes are rated ‘C’ or above with a total of 94% reaching this benchmark.  It is also interesting to note that homeowners with a mortgage are more likely to have a more energy efficient home than those who own their home outright.  One key factor is that outright owners are likely to be older and have lived in their home for a much longer period with their home tending to be older and less energy efficient.

The Rented Sector

In the rented sector, private landlords are losing compared to the social housing sector, mainly due to tighter regulations in the social sector. The privtae sector should catch up over time, driven by mortgage lenderrs requiring a higher EPC rating with most lenders not even lending where the property cannot achieve a rating of at least ‘E’.  Something our Landlord clients should seriously consider when adding to your portfolio.

Mortgages

Some mortgage lenders have started to offer Green Mortgages with better rates and incentives.  These require an EPC rating of A or B.  At present the incentives are marginal but hopefully more lenders will enter this market and increase the benefits for Greener Homes in the future. It is certaily something we wil consdier when looking for your next mortgage.

Improving your Rating

I am sure we would all like to do our bit for the environment and save our ourselves a bit of cash in our utility bills each month, but it can be quite expensive to bring a house’s rating up to C and even more expensive for houses with current rating of F and G.  The report suggests that to bring a house with a rate of F or G up to a C would cost an average of £25,800 but offer an annual saving of £1,780 meaning that your investment would be recovered in 14 years.  The cost is much less for D rated properties at around £8,100.  I suppose a strating point could be to have an energy smart meter installed and monitor your energy usage saving energy where possible.

Check your EPC Rating

Why not check the rating on your home which you can do if a certificate has been produced by checking the EPC register here  (This takes you to a the Governments website of which we have no affiliation and take no responsibility for.)