High EPC ratings don’t boost property sale prices -...

Energy performance certificates (EPC) make little difference to property sales and the Government should consider replacing them with more effective green tools, agents claim.

Analysis by Propertymark has called into question how much of a difference EPCs make when marketing a home and their usefulness in helping homeowners make their property more energy efficient

New research from the agency trade body reviews the influence of EPCs on the decisions of homebuyers based on member feedback.

Almost three quarters of agent members said buyers sometimes show an interest in EPCs but 15% reported that they never show an interest.

This is an improvement on its 2018 survey, in which 35% of sales agents reported that homebuyers never show an interest in the EPC.

Almost half of residential sales agent members reported that EPCs never influence the offer homebuyers make on a property, while only 1% reported that it always has an impact.
This picture has still improved since 2018 when 71% of respondents reported that EPCs never influence the offer homebuyers make.

Agents were also asked if, in their experience, high EPC ratings influence property prices. Most said this was not the case while 66% said they did not believe energy efficiency measures help boost a property’s value.

The trade body acknowledged that this contradicts other industry research, adding:”the vast majority of these studies use market data to analyse the impact of EPCs on price and have not asked the agents who set or negotiate the price directly.”

To address this, Propertymark has suggested replacing EPCs with a Property Passport or Net Zero Performance Certificates (NZPCs) as proposed in the Independent Review of Net Zero.

It said: “EPCs are criticised for the manner in which they account for the cost of energy when determining property performance, which can result in misleading scores when transitioning to more expensive but greener energy sources like heat pumps.

“NZPCs, which provide detailed information about heating technology and its financial and social effects, would be a better alternative.”

It suggests more financial incentives are required to promote energy efficiency such as vouchers to cover the costs of retrofit evaluations, loans and grants to pay for energy efficiency improvements, the allowance of energy performance improvements to be offset against rental income, or the ability to offset improvement costs against capital gains tax.

Timothy Douglas, head of policy and campaigns at Propertymark, said: “Our most recent research shows that, while interest in energy efficiency ratings is growing, a higher EPC rating of a property is not having a significant impact on the sale price in most instances.

“If Governments and departments across the UK are serious about moving to net zero through reducing the energy consumption in homes and buildings, landlords and homeowners need a greater financial incentive and support to make energy efficiency improvements.

“The majority of our member agents agree that the best way to do this is to provide clarity on targets, enhance the role of EPCs and introduce grants that cover a broader range of improvements, which is especially important at a time when rising mortgage and other living costs are making it more difficult for many homeowners and landlords to foot the bill for these upgrades.”

Christopher Grant
18 August 2023 12:31 PM

In 99% of EPCs the installation of an Air Source Heat Pump (ASHP) will reduce the EPC rating. This is due to the RdSAP software treating an ASHP as an electrically fuelled source of heating. It is not in anyway influenced by the Energy Assessor who is simply recording and inputting the data. Chris Grant - Founder and CEO of EPC Choice