How could improving EPC affect your property price?

Energy Performance Certificates (EPCs) have become increasingly important in the UK property market. As energy prices remain high, buyers and tenants continue to be highly aware of the cost of energy bills. And this is bolstering demand for energy-efficient homes.

At the same time, the UK government is planning to introduce new regulations that will make it mandatory for landlords to have an EPC of C or better for their rental properties by 2025, with few exceptions. This could further increase the demand for energy-efficient homes, as landlords will be required to improve the energy efficiency of their properties in order to comply with the regulations.

What is an EPC?

An EPC measures the energy efficiency of your home. It assigns your home a rating on a scale from A to G, with A being the most energy efficient and G being the least energy efficient.

The closer your rating is to A, the lower your energy bills are likely to be. On the other hand, a closer rating to G can imply higher energy costs and a larger carbon footprint, making the home less attractive to prospective buyers or tenants.

The certificate also suggests your home’s potential EPC rating should you make certain changes that it recommends to improve its energy efficiency.

How EPCs affects property prices

Since buyers and tenants are increasingly aware of the cost of energy bills, they’re more likely to pay a premium for a home that’s energy efficient.

For this reason, homes with a better EPC rating are typically worth more than homes with a worse EPC rating.

Our own analysis of properties in Bristol shows that improving the energy efficiency of a home could increase its value between around £2,000 and £15,000.¹

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A Rightmove report also suggests that improving a home’s EPC rating from an F to a C increases the sold price by an average of 16%.²

Why are buyers willing to pay a premium?

There are a number of reasons why buyers and tenants are willing to pay a premium for energy-efficient homes:

• Energy-efficient homes use less energy, which can save money on energy bills.
• Energy-efficient homes are often more comfortable to live in, as they’re less likely to be cold in the winter or hot in the summer.
• Energy-efficient homes are better for the environment, as they produce less carbon emissions.

How to improve the EPC of your home

Homeowners and landlords who want to maximise their property's value should consider investing in energy-saving measures, such as insulation, double glazing, and renewable energy systems.

These investments could not only save money on energy bills, but they could also make their properties more attractive to buyers and renters - ultimately leading to a higher market price.

There are lots of ways to improve your home’s energy efficiency, and they’re not all as costly as fitting solar panels. For example, draught-proofing windows and doors can be a low-cost way of making your home more efficient and improving your home’s EPC.

We’ve explained 12 ways to make your home more energy efficient in our article, How to improve home energy efficiency (ranked from low to high cost).

The future impact of EPC on property prices

In the UK, the minimum EPC rating for a new rental tenancy is currently E. But the government has proposed tightening this regulation to C from 2025 (although it seems this may be delayed to 2028).

This change could have a significant impact on the UK housing market. Properties with low EPC ratings are likely to become less desirable, and as a result, their value is likely to decline. At the same time, properties with high EPC ratings are likely to attract a higher market price.

Homeowners who fail to make energy efficiency improvements may find themselves at a competitive disadvantage.

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1 https://www.snuggenergy.com/home-energy-efficiency-report/bristol

2 https://hub.rightmove.co.uk/green-upgrades-help-sellers-pocket-up-to-16-more-for-their-home/