Energy efficiency rating: how important is it?

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If you’ve ever been in the market for buying or renting a home, you’re probably vaguely familiar with what an energy efficiency rating is. It’s not necessarily, however, something that most people attach serious importance to. Not yet, that is. Changing legislation when it comes to getting a mortgage could see a home’s Energy Performance Certificate (EPC) increase dramatically in importance - find out how you’ll be affected reading on.

What is an energy efficiency rating?

A home’s energy efficiency rating is a measure of how efficiently the property retains heat. When a home is built or when it is put up for let or sale in the UK, it needs an Energy Performance Certificate (EPC).

An EPC comes with a rating using the government’s Standard Assessment Procedure (SAP), which scores your home using SAP points out of 100 and assigns a rating of between A and G according to this score. Here’s the score you need for each rating:

  1. A: 92-100 points (highest efficiency rating)
  2. B: 81-91 points
  3. C: 69-80 points
  4. D: 55-68 points
  5. E: 39-54 points
  6. F: 21-38 points
  7. G: 0-20 points (lowest efficiency rating)

These numbers won’t mean much if you’re new to this, but basically the higher a property scores, the better it is at retaining heat and the less energy it needs to do so. This has always been in the homeowner or tenant’s interest as it means lower energy bills, but not everyone is keen to invest in order to achieve it.

How can I improve my energy efficiency rating?

Here are a few ways you can improve your home’s energy efficiency rating:

  • Installing double glazed windows and doors.
  • Loft insulation that’s at least 270mm thick.
  • Wall insulation.
  • Getting a new, energy-efficient boiler installed.
  • A more efficient secondary heating source, such as a wood-burning stove instead of an open fireplace.

Any one of these measures, if you’ve not already taken them, will help bring your EPC rating up and bring the cost of heating your home down. As we’ve mentioned, this has always been important, but will become even more important in the coming years, as government legislation looks to encourage homeowners to modernise their properties.

Cheaper mortgages for homes with high EPC rating

Energy efficiency ratings are becoming an increasingly important consideration when it comes to housing, as the government has made several legally binding commitments relating to improving energy efficiency standards.

These commitments include making it illegal for landlords to let properties which fail to meet minimum standards from April 2025. Signs that the property market is responding to this eventuality are already beginning to appear, with certain lenders already putting restrictions on new mortgages based on energy efficiency.

A new 3.99% five-year fixed deal for buy-to-let landlords has been introduced by Paragon Bank this month. This is one of the best rates on the market and is only available to homes which meet high energy efficiency standards. It’s the first sign that lenders are getting in line with policy that will be commonplace come 2025.

Government help for low-efficiency homes

Homeowners with low energy efficiency ratings in some areas will be encouraged to learn that local governments are doing what they can to help those with low energy efficiency ratings. Glasgow city council is planning a retrofit programme to help up to 428,000 homes install insulation and low/zero emission heating technologies.

District councils in Somerset have also received grants to improve the energy efficiency of social housing and owner-occupied homes in the region in recent weeks. These initiatives show that the government is at least willing to help people cope with these changes in regulations, and you can see if you’re eligible for help under the Green Homes Grant by visiting the relevant government website.

While upgrading a property to bring it up to these standards may be a bit of a hassle and an investment, we think it’s great that the government is taking steps to improve energy efficiency and lower carbon emissions. It will mean cheaper gas and electricity bills and less impact on the environment, which are two things we can really get behind!

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