Photo by The Flawed System of Energy Performance Certificates
Energy performance certificates (EPCs) have been a cornerstone of the UK’s efforts to reduce carbon emissions and improve energy efficiency in homes. However, a recent study by Which? has revealed that EPCs are “riddled with inaccuracies and unhelpful advice,” highlighting the need for reform.
The consumer body selected 12 homeowners across the UK and booked EPC assessments between February and March to probe the accuracy of these tests. The properties tested were built between 1650 and 1999 and ranged from a one-bedroom flat to a five-bedroom detached house.
The results uncovered issues with the accuracy of the results and the recommendations that homeowners received. In one case, a homeowner had their EPC survey done, but never received their certificate. The survey fee was refunded, but the homeowner never learned about their home’s energy efficiency.
An example of an EPC certificate
Of the remaining 11 participants, just one was ‘very satisfied’ with their EPC, and only three said they were likely to recommend getting an EPC, based on this experience. Most participants – eight out of 11 – complained that their EPC did not appear to be accurate, adding that descriptions of key aspects of their home like the windows, roofs, and heating systems were incorrect.
The study highlighted Megan Dobney’s case, who achieved a D rating for energy efficiency for her two-bedroom Victorian terraced house in London. Her EPC recommended several improvements, including internal or external wall insulation, suspended floor insulation, solar water heating, and solar panels. However, installing all four could cost up to £26,700, and she would only see the property rise by one band from D to C.
Solar panels, one of the recommended improvements
Dobney says: “The recommended changes are extremely expensive, generally for small savings each year, and would require massive disruption.”
Which? director of policy and advocacy Rocio Concha adds: “Our research shows they are in desperate need of reform – with current certificates often inaccurate and only suggesting costly improvements with long payback periods.”
A Property Passport to the Rescue
Propertymark head of policy and campaigns Timothy Douglas suggests that introducing a property passport could increase the uptake of energy efficiency improvements. This would enable information to be transferable across building owners and help maintain a long-term decarbonisation goal for the building.
The process would not replace EPCs but enhance them, creating an opportunity to capture EPC data digitally and add to it with other data over time. A property passport would also provide detailed guidance on the actions required, and already undertaken, to improve the property, based on building fabric and operational data helping building owners and occupiers make decisions to improve the energy efficiency of buildings.
The Impact on Mortgage Borrowers
The issue of EPCs also has implications for mortgage borrowers. Labour’s proposal to introduce a “genuine living wage” could lead to higher unemployment and increased mortgage costs, economists at HSBC have warned.
Sir Keir Starmer’s party has pledged to bring in a ‘New Deal for Working People’ within its first 100 days if elected, which includes replacing the minimum wage with a living wage reflecting the cost of living.
HSBC economists Elizabeth Martins and Emma Wilks cautioned that raising the minimum wage significantly could increase business costs, reduce efficiency, and potentially lead to job cuts.
A Shift in Mortgage Lending
In related news, LiveMore has removed the maximum age and increased the term for its standard mortgage range. The removal of the maximum borrowing age applies to the lender’s standard capital and interest, and standard interest-only mortgage ranges.
The later life lender has also increased the maximum mortgage term across its standard ranges to 40 years, up from 30 years on interest only and up from 35 on capital and interest.
A mortgage application
The changes are expected to assist a wider range of customers who are just as creditworthy as any other segment of the market.
Conclusion
The issues with EPCs and their impact on mortgage borrowers highlight the need for reform in the industry. As the UK strives to reduce carbon emissions and improve energy efficiency, it is essential to have a reliable and accurate system in place. The introduction of a property passport and changes in mortgage lending could be a step in the right direction.
