EPC Ratings On House Prices

Do EPC Ratings Have Any Impact On The Value Of A Property?

Energy efficiency ratings are currently having a limited impact on house prices, despite the 'push to go green', according to the latest figures from Nationwide.

Nationwide included energy efficiency ratings from energy performance certificates (EPCs) alongside the usual data in its House Price Index. Its analysis suggests that a more energy efficient property rated A or B attracts a modest premium of 1.7% compared to a similar property rated D (the most commonly occurring rating). There is little difference for properties rated C or E compared with D.

There is a more noticeable discount for properties rated F or G, the lowest energy efficient ratings, which are typically valued 3.5% lower than a similar D rated property.

Andrew Harvey, Nationwide's senior economist, said: “Decarbonising and adapting the UK’s housing stock is critical if the UK is to meet its 2050 emissions targets, especially given that the housing stock accounts for around 15% of the UK’s total carbon emissions."

With this in mind, paying a premium or discount for a home due to its energy performance rating, for now at least, energy efficiency has only a modest influence on house prices for owner occupiers, where an impact is only really evident for the best and worst energy efficiency ratings.

However, the value that people attach to energy efficiency is likely to change over time, especially if the government takes measures to incentivise greater energy efficiency in future to help ensure the UK meets its climate change obligations.

The current EPC rating is E and by 2025 the energy rating will be C which will apply to new tenancies, existing tenancies will also apply by 2028.

The regulation changes hoping to make homes more energy-efficient and reduce carbon emissions as part of the government target to be net-zero by 2050.

The penalty for not having a valid EPC will also be raised from £5,000 to £30,000 from 2025.