Does a good EPC rating improve the value of my property?

Many homeowners see getting an EPC when they sell their property as a tick box exercise. The EPC is used to give an indication of how energy efficient the property is, and is based on a scale of A-G, with ‘A’ being a really well performing property.

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

Comparing EPCs

To answer the question, we are actually going to use two customers we have recently visited – they live on Kybes Lane near Reading 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 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. The old oiler boiler has been replaced by an ultra efficient ground source heat pump. External wall insulation has been added to the outside of the property. The levels of loft insulation have increased dramatically and this property even know has a solar 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 are low.

The two properties have been recently placed on the market, for £905,000 and £650,000. Now 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 property has had certainly are a factor in the much higher retail price.

Benefits of a high EPC rating

Obviously the EPC doesn’t have a direct bearing on the price of property, but a high EPC rating does suggest the property is either modern and therefore built to high energy efficient standards (so should only require minimal maintenance costs) or the fact the property has been recently updated (which will mean low 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 (FiT contracts now last 20 years from the date they commence, and the Renewable Heat Incentive is 7 years).

We can draw similar conclusions when comparing other efficient/inefficient properties across London 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.

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 decent 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 only required every 10 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 or commercial EPC carried out on a property please give us a call on 0208 819 2166 or send us an email to epc@london-epc.co.uk and we will get one of our highly trained assessors to carry this out for you.

This blog has been compiled by Alan Bouquet, one of our lead energy assessors here at London EPC. He has completed over 5,000 energy performance certificates over the last 8 years and has a huge amount of experience. If you have any questions for Alan, or any members of the team here at London EPC, please feel free to comment below.