Over half of all residential properties in England and Wales are currently failing to meet the government's long-term energy efficiency targets, with 55% rated below an Energy Performance Certificate (EPC) C grade. This figure underscores the scale of the challenge in retrofitting the nation's housing stock to achieve net-zero ambitions and reduce household energy consumption.
The government has set an aspiration for as many homes as possible to achieve an EPC C rating by 2035, with a more immediate target for privately rented properties to reach this standard by 2028. However, the current data suggests a significant proportion of homes will require substantial upgrades to meet these benchmarks. EPC ratings provide a measure of a home's energy efficiency, from A (most efficient) to G (least efficient), with recommendations for improvements to reduce energy use and carbon emissions.
For homeowners, particularly those in older properties, the cost of improving an EPC rating can be considerable. Upgrades might include better insulation, double or triple glazing, or installing more efficient heating systems like heat pumps. While these investments can lead to lower energy bills in the long run and potentially increase property value, the upfront expenditure can be a barrier for many households, especially amidst the current cost of living pressures.
Landlords face specific regulatory pressures, as the proposed changes to minimum EPC standards for rental properties would make it illegal to let a property with an EPC rating below C from 2028. This potential legislation has prompted concerns within the buy-to-let sector regarding the financial burden of upgrades, with some landlords considering selling off less efficient properties rather than investing in costly renovations. This could, in turn, impact the supply of rental homes and potentially push up rents.
First-time buyers and existing homeowners are also increasingly considering EPC ratings when purchasing. A higher EPC rating can signify lower running costs, a significant factor given fluctuating energy prices. Mortgage lenders are also beginning to offer 'green mortgages' with more favourable rates for energy-efficient homes, or those that commit to making improvements, further integrating energy performance into the property market's financial landscape.