House Prices Linked to Energy Performance?

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House Values Energy PerformanceEnergy assessment is seen by most as a necessary legal evil that needs to be followed. I predict that these assessments will be eventually used to help value your home and be used to gauge mortgage suitability.


We have been operating the UK’s largest ‘for sale by owner’ website at The House Shop since 2000. Today we see consistent confusion that baffles British homeowners regarding their legal requirements concerning Energy Performance Certificates or EPC’s


 In October 2008, all properties put onto the market to-let required an Energy Performance Certificate (EPC). Until May 2010, all properties that were put onto the market for sale required a HIP, which included an EPC. When the Coalition Government came into power, HIPs were suspended and now home sellers are only required to provide an EPC prior to commencing marketing on the property.


The process is regarded by many as a massive inconvenience and unnecessary red tape brought in by Brussels. Landlords and owners are obliged by law to have an Energy Performance Certificate in place when they build sell or rent a property. EPC’s are valid only when created by accredited assessor:


An EPC is valid for 10 years. However, if you make major changes in that time, such as fitting double glazing or changing the boiler, it may be worth commissioning a new one to reflect these.


EPC’s tells the potential tenant or homeowner how energy efficient a property is. New tenants and homeowners can use this information as an indication on how high their gas and electricity bills will be.

This efficiency will be rated on a scale from A to G, with the most energy efficient home achieving an ‘A’ rating. An EPC will also advise on the impact the property has on the environment and provide recommendations on how to make the property more energy efficient.


It’s a fact that in the UK buildings are responsible for around 40 per cent of the UK’s energy consumption and carbon emissions. Backed by European law, as part of the Energy Performance Buildings Directive (EPBD), the introduction of EPCs is an important step in highlighting people’s awareness of energy wastage.


Tenants and buyers are increasingly asking to view the EPC and most online advertising gives access to this information.


In 2012 Deloitte predicted that 2012 would see an increase in investor attention on the energy ratings. This led investors to take a more rigorous view of their assets and portfolios as the Energy Act 2011 promised to mark buildings with poor energy ratings as unlettable without certain steps being taken to improve them


In Deloites report entitled UK real estate predictions 2013 they state that have now seen lenders begin to factor Energy Performance issues into their lending decisions. The report advises occupiers on the implications for their liabilities too


It seems to me that rather than an annoyance for those who have to order an EPC it may well be a factor that affects saleability and property valuations.  I can see a future where mortgages will not be approved when homes are proved to be inefficient.


Property investors will need to factor this element into their portfolios and any buy to let investor would in my view be unwise not to rectify a property that has a poor rating. For the savvy investor seeking to buy more property using poor Energy Performance grades will be an obvious bargaining tool


With the pressure on the UK government to perform better with fewer emissions who is to say that new regulations may come into force that could lower property values at the stroke of a pen. The next government will in my view move towards this type of regualtion


Directive, there is a significant number of policy and regulatory reviews ongoing which is creating uncertainty within the market on how the relevant policy objectives will be implemented in practice. 


Nick ((Nicholas Marr)) Marr

Author : Nick Marr is behind international real estate website and The House Shop and has contributed to government consultations regarding the UK housing market.

He is also qualified at the National Federation of Property Professionals

Linkedin: Nick Marr

Twitter : NickCMarr


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Useful resources – EPC

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