Importance of greener homes driven by cost-of-living
The energy efficiency of a property is now much more important in the residential market than it ever has been, an industry expert has suggested.
John Baguley, director of technical, risk and compliance at Countrywide Surveying Services, said the financial benefits of an energy efficient property equated to significant financial savings.
Awareness was also growing among consumers, particularly given the cost-of-living crisis.
“It would have been quite surprising for many to learn the extent to which emissions come from the built environment,” said Baguley (pictured).
Without having an Energy Performance Certificate (EPC) A-E rating, a property could not be let under current government guidelines. More stringent rules and regulations were set to come into effect regarding EPC ratings and it was no longer just a tick box exercise, Baguely said. The rating now had real benefits in terms of lower running costs, but also cheaper mortgage payments and increased buyer appeal.
“The importance of energy efficient housing stock is becoming increasingly crucial and will continue to do so,” he said. “Not just from a financial view point but a social responsibility angle too,” he offered.
Baguley believed that education was key to ensuring that correct measures were taken at the right time, and added that professional advice should always be obtained before commissioning works.
Maeve Ward, director of commercial operations at Central Trust highlighted that landlords faced a stark deadline of 2025 to improve their rental properties’ EPCs.
“By then, every buy-to-let property with a new tenancy will have to have an EPC rating of C and existing tenancies will have until 2028,” she added.
Ward said that the age and variety of housing stock across the UK suggested that a huge number would struggle to meet any new regulations without extensive works.
“Indeed, estimates for the cost of bringing all housing in the UK, not just rental properties, up to a minimum EPC rating of C total £304 billion,” she added.
She believed that the largest single incentive for homeowners to improve the energy efficiency of their homes was the cost-of-living crisis and soaring energy bills.
With gas and electricity bills rising almost fourfold on average, Ward noted the pressure on households to make their homes more energy efficient was greater than ever.
“With the base rate currently at 3% compared to 0.1% a year ago, remortgaging to pay for energy improvements is not a financially viable option at the present time,” she said.
Instead, Ward pointed toward a second charge mortgage being a better option as it would enable a homeowner to protect their preferential mortgage rate while both improving the EPC of their property and potentially increasing its value.
Once mortgage rates had improved, she said, the borrower could remortgage and clear the second charge, potentially on a cheaper rate due to the uplift in the property value, resulting in a reduced loan-to-value (LTV).