The popularity of green properties appears to be on the rise
The topic of green homes has become increasingly prominent of late due to the cost-of-living crisis outlining the effectiveness of an energy efficient property.
As increasing energy bills continue to ravage homeowners across the UK, interest among homeowners in improving their Energy Performance Certificate (EPC) rating is on the rise.
“Green houses are on everyone’s lips at the moment, interest has risen and it is important lenders satisfy customer’s needs,” said Trudy Woolf, sustainability director of Legal & General Surveying Services.
Woolf explained that advice is key and went on to say that there is a lot of advice for customers wanting to retrofit their properties. However, in terms of functionality, she said it is important lenders do more here.
“The government has released a guide on retrofitting properties, although I believe lenders and brokers should be advising their clients more in this area,” she added.
Read more: Green homes – what role will they play in UK's net zero climate strategy?
As well as this, Woolf said surveyors could offer advice, and believes it is important the guidance comes from people who truly understand the subject they are advising on. Explaining to a customer what could go wrong is essential, and this is something Woolf believes would greatly benefit the customer’s experience.
She also noted that given the economic conditions, understanding EPC ratings and how to increase a property’s rating are particularly important.
“The savings on energy bills through having a higher EPC rating are massive, and at a time when people are struggling financially, providing advice on how to reduce their monthly expenses would be a great help to many,” Woolf said.
Woolf explained that increasing a property’s EPC rating will have an impact on the resell value of the home, as the importance of energy efficient properties is only set to rise given the government’s targets in this area.
“Rightmove’s green paper has revealed that there is a relation between EPC and resell values, so the data is there to prove the benefits of upgrading a home,” she added.
Woolf noted that valuers are not saying there is a direct correlation between higher EPC ratings and increased prices, but also noted that if buyers are willing to pay more for a property as the monthly bills will be less, then there is a link.
She believes that people need to understand their properties, and added that finding out where and how they can access advice is essential for the market to improve upon.
“Homeowners have less money right now, and the government will be key here through offering funding to support those that are struggling the most,” she said.
While government support would go a long way, Woolf outlined that good quality advice can help some people avoid getting to the stage where they need support from the government.
According to Woolf, lenders have begun to offer lower rates to customers with higher EPC rated homes, which she said is encouraging to see and will motivate people to conduct improvements on their properties.
She said, however, that lenders must be mindful of the customers who cannot afford to retrofit their properties, and added that lenders must not isolate this part of the market.
Read more: How the valuation industry is transitioning to a net zero world
Looking to the future, as energy prices continue to rise, Woolf believes the new build market may continue to increase in popularity, as this type of home usually offers lower EPC ratings from the get-up.
In 2025, all new buy-to-let properties will be required to have an EPC rating of C, and Woolf believes landlords are already considering these changes.
“In some cases, landlords will sell their properties as it will not be cost effective to improve the home’s rating. This is likely to push these properties down the ladder and into the hands of first-time buyers,” Woolf said.
She believes this will simply kick the can down the road, and she said first-time buyers will be stuck doing the renovations themselves.
On top of this, Woolf said she expects that commercial landlords may also look to purchase these properties and turn them into HMOs.
Overall, Woolf explained that advice is the key, and said that brokers should make their customers aware of the importance of buying lower rated EPC properties, as the long-term benefits are there for all to see.
