Use your EPC to make your property more energy efficient and valuable

Whilst its true that many homeowners see getting an EPC when they sell their property as a box ticking exercise and just another tiresome formality, in fact the EPC is used to give prospective buyers an indication of both how energy efficient the property is, and is based on a scale of A-G, with ‘A’ being a really well performing property - the EPC also displays both the current and potential annual running costs which for some people will be a very important metric on which to base their purchasing decission.

The question we ask here is whether having a good EPC rating makes a difference to the selling price of the property.

A tool for comparing EPCs

To look at how this affects things, we’ll use two hypothetical vendors we have recently visited – We’ll say they live on Acacia Avenue near Northampton and are neighbours. The properties have the exact same footprint, but the difference in EPC rating is stark:

One property has a ‘B’ rating, while the other has a ‘F’. How do the two properties with the same footprint have such different energy ratings? And further to that, is one worth more than the other on the open property market?

The ‘B’ rated property is privately owned and the neighbouring property is rented from a large management agency. Over the last 3 years, the higher rated property has undergone substantial updates and improvements. The old inefficient boiler has been replaced by an ultra efficient ground source heat pump with a full range of heating controls. External wall insulation has been added to the outside of the property. The levels of loft insulation have increased dramatically and this property also now has a solar PV array on the roof, meaning the homeowners benefit from free electricity and government payments in the form of the feed-in tariff.

The other property has not undergone any of these works and since it is managed by a large property, the prospect of these works taking place in the future are low.

The two properties have been recently placed on the market at significantly differnt prices and obviously the reasons for this could be related to other things like the quality of the internal finish, but it seems that the extensive works that the improved property has had certainly has been a factor in the much higher asking price.

Benefits of a high EPC rating

Obviously the EPC doesn’t have a direct bearing on the price of any property, but a high EPC rating does suggest the property is either modern and therefore built to a high energy efficient standard (so should only require minimal maintenance costs) or the fact the property has been recently updated (which will mean lower energy bills.)

In the case of the energy efficient property that we are looking at here, future buyers will also benefit from the Renewable Heat Incentive payments along with the feed-in tariff payments for the remainder of the contracts.

We can draw similar conclusions when comparing other efficient/inefficient properties across Northamptonshire, Milton Keynes and the surrounding areas. It is fairly common for properties – even when they are sat right next to each other – to have very different levels of efficiency and general upkeep.

The good news is that it looks like energy efficiency of properties will become ever more important as time goes on – and rightly so in our opinion. This is partly because the Government are currently considering linking council tax payments to the efficiency of the property in question, this allows for a mechanism of rewarding households who look to invest in making their properties more efficient.

Also with the introduction of MEES (minimum energy efficiency standards) which currently only allows landlords to rent out properties which achieve a band ‘E’ or above, it is crucial therefore that landlords in particular take an active interest in the energy efficiency of their property stock if they wish to continue renting them out - This is also currently under on going consultation to raise this to a band ‘D’ and then ‘C’ over the coming years.

Does a high EPC rating improve my property’s value?

So going back to the question we first asked, does a good EPC rating improve the value of my property? Well – in a word – yes. Not specifically because of the EPC, but more because of the what it suggests about the property (that it has been well looked after/made more energy efficient). This is especially the case in older properties that have a good EPC rating (band ‘C’ and above).

When you are next buying a property, don’t discount the information contained in the EPC; you can tell a huge amount about the property if you look through it and it should help you to compare like-for-like properties very quickly. It is worth quickly mentioning that an EPC is currently only required every 10 years although this again is under consultation to be reduced to 5 years, so the EPC for the property you are considering may no longer be valid. Please check with the estate agent if you need further clarification on this.

If you are interested in getting a residential EPC carried out on a property please give me a call on 07851 957628 or send me an email to david@nnhes.co.uk and i will be happy to carry this out for you.