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Residential property specialist, Kayleigh Curtis, explains the increasing importance of Energy Performance Certificates for sellers.Until recently, contacting an estate agent was top of the priority list when marketing your home. But for many sellers, the first port of call is increasingly an Energy Performance Certificate (EPC) provider.
Over the years, we have followed the evolution of energy performance requirements in the private rental sector. And as a result of the MEES Regulations, since 1 April 2020, a landlord cannot let a property with an EPC rating of lower than E unless an exemption applies.
Now, amid an energy crisis and the unstoppable push towards carbon zero, your home’s EPC rating is arguably as important to a potential buyer as to a tenant.
What is an EPC rating?
A home’s energy performance certificate rating ranges between A and G, with an A rating as the most efficient. As you might expect, new-build homes invariably have a high rating. However, in England and Wales, the average EPC rating is D.
The more obvious factors affecting energy efficiency are the presence or otherwise of loft and cavity wall insulation and double or even triple-glazed windows. However, other steps that will help improve your home’s rating include:
- upgrading to LED light bulbs.
- installing underfloor insulation.
- upgrading your boiler.
- installing underfloor heating.
- upgrading to a smart meter.
- installing solar panels.
Introduced in 2007, the EPC is a survivor of the long-defunct Home Information Pack. Although valid for ten years, many sellers cannot recall whether their home has one. The easiest way to check is using the Government’s Find an Energy Certificate search facility.
Green mortgages
But it’s not just your buyer who is increasingly interested in your home’s energy efficiency. In addition, some mortgage lenders offer a better interest rate or even cashback to buyers taking out a green mortgage on an energy-efficient property. Broadly, the two categories of green mortgages are:
- those rewarding the borrower for living in an energy-efficient home (invariably, qualification depends on an EPC rating of A or B); and
- those rewarding the borrower for carrying out ‘green’ home improvements.
Lenders offer these incentives as they increasingly consider properties with a high EPC rating more likely to hold their value. Also, if a borrower spends less on their energy bills, there’s less chance of them struggling to pay their mortgage. Among the lenders offering these products are:
Energy-efficient homes are more attractive to buyers
Not only will improving your home’s energy efficiency make it more appealing to potential buyers, but it may also increase its value. In addition, displaying an EPC rating is becoming fairly standard on property websites such as rightmove. And the cost of obtaining a certificate – usually between £35 and £120 – is a drop in the ocean compared to the overall cost of moving.
Also, if you are looking for a buy-to-let mortgage, remember that lenders are already refusing to lend on properties with a rating of D or less in anticipation of further changes to the MEES Regulations.