There’s no doubt that we need to improve the green credentials of our homes. But how bumpy will the road to greener homes be, especially when so much of the UK’s housing stock is below an EPC rating of C?

Currently, properties below an EPC rating of E cannot be rented out, without a valid exemption. There are proposals that could see this requirement move up to a C rating. The government’s wider ambition is to get as many residential homes as ‘practicable’ up to an EPC rating of C by 2035. Futureproofing has already begun, this has introduced new requirements and targets for energy efficiency for new homes and renovations. What we don’t yet know is how much progress can be achieved through awareness and persuasion alone, and how much more legislation could be to come. The uncertain political outlook is likely to delay any big changes. To date the government has said that no home, no matter how energy inefficient, will become unmortgageable. However, over the coming years could we see EPCs, or other ways of measuring green features, become as important as a big garden, a desirable location, and a quick broadband speed? We think it’s likely, but perhaps not until it becomes a lot harder to get a good mortgage deal on a poorly rated home.

The good news is that there’s a clear correlation between making improvements and the value of a home increasing. An analysis of 200,000 homes that were up for sale, and later came up for sale again with an improved energy rating, found that homes going from an F rating to a C rating added 16% to the value of a home. This premium is on top of the local house price growth the home may have benefitted from since it was last sold.

Key Takeaways:

More home-hunters are taking notice and searching for green features, and more agents are using them as selling points

There’s a correlation between higher ratings and higher property values, and recently EPC B-rated houses became the fastest type to find a buyer, overtaking D-rated house 

Landlords are reviewing their portfolios to assess if the investment in making improvements is worth the return

Letting agents are waiting patiently for detail on the requirements and what they should be advising their landlord.

There’s a clear desire from home-owners to make improvements such as installing solar panels, but there are many obstacle.

People want to make changes. A number can’t afford it, and many don’t know what to do