How your EPC rating impacts your property value

In 2013, the UK conducted its first large-scale empirical study on the effect of an EPC rating on the value of a property. This report suggested that there was a correlation between good EPC ratings and the value of a property per square metre. They noted that properties with an EPC rating of A or B sold for at least 14% more than their counterparts¹.

A lot has changed since then. Is it still fair to say that your EPC rating impacts the value of your property?

What is an EPC? 

In short, an EPC is an Energy Performance Certificate, which rates your property on a scale from A to G, with A being the highest and most energy efficient.  

You need a valid certificate if you’re selling or renting a property, as they’re an important part of understanding how much you could expect to pay on your property’s energy bills.

The impact of your EPC rating

There have been some interesting stats that have come out recently stating that around 71% of homebuyers consider a home’s EPC rating an important part of their decision-making, with many noting they would pay more for a home with a good EPC rating. Furthermore, around 59% of homebuyers are willing to pay more for a property where at least 75% of its energy comes from renewable sources².

With the rising cost of energy, this may not be all that surprising.

Does a high EPC rating change the value of your property?

With the above in mind, it’s safe to say that your EPC rating could affect the value of your property, but does it still fall within the 14% increase that the government previously outlined?

Knight Frank compared the EPC certificates of 30,000 properties with an improved energy performance over a five-year period, looking at both pre and post improvements³. 

They estimated that taking a property from band D to a C could cost around £5,500, with the national average almost doubling for properties currently at an F or G. This tells us that there need to be incentives to making these changes, which often come in the form of increased property value. 

Their analysis states that you might see the following increases in home value by improving your EPC:

• Moving from a D to a C could add 3% value over and above local house price growth (around £9,000 based on average resale figures)

• Moving two bands up (for example, an E to a C) could increase your value by 8.8% (around £29,000)

• Improving your EPC from an F or G to a C could add 19.6% in value (about £64,400).

What this really tells us is that yes, improving your EPC improves the value of your home, sometimes more than the original 2013 average. However, it’s important to make the right decisions when doing so.

You may need to balance these improvements with upfront payments or consider the potential payback times you may need if you’re not planning on selling immediately.

What you can do about it

Finding the extra cash right now for major home improvements may feel overwhelming, but there are some easy things you can do if you’re looking for a handful of quick wins. We’ve put together an article to help you improve your EPC rating, so check that out for further advice. 

You could also consider remortgaging your property to release the equity needed to make such improvements, but this must come with the right considerations, as you want to do what’s best for your home and budget. 

Chat with a mortgage adviser today about your options and the steps you could potentially take to improve your EPC rating and increase your property value. 

You may have to pay an early repayment charge to your existing lender if you remortgage.

Your home may be repossessed if you do not keep up repayments on your mortgage.

There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

¹GOV.UK, 2013

² Savills, 2022

³Knight Frank, 2022