"Until we see reform of the current EPC, it is very hard for homeowners and those tasked with upgrading the UK’s housing stock to make any significant headway."
We recently heard David Geale, director of retail banking at the Financial Conduct Authority (FCA), caution lenders against offering mortgage products that would simply ‘green’ their balance sheet, rather than help decarbonise the UK’s housing stock.
While most would agree there is still some fine-tuning needed to some lenders’ green mortgage propositions, they will eventually play a key role in helping the UK meet its net zero target. Yet until we see reform of the current Energy Performance Certificate (EPC), it is very hard for homeowners and those tasked with upgrading the UK’s housing stock to make any significant headway.
We know changes to the EPC are coming and when they do, it is expected the rating will consist of two parts: one that will focus on the cost of running the property and the other, its carbon footprint.
We still have a situation where a homeowner looking to improve the carbon footprint of their home could spend thousands of pounds doing so but not necessarily see this reflected through a better EPC score, due to it being calculated on a cost matrix.
The recent figures from Ofgem, which showed the Government’s Boiler Upgrade Scheme had fallen short of its target to install 30,000 heat pumps, will not have come as a great surprise.
The scheme offers homeowners £5,000 towards the cost of installing a pump, yet just under 10,000 heat pumps were installed in homes across England and Wales during its first year - utilising just £60m of the £150m budget on offer.
It is not hard to see why: an air source heat pump is estimated to cost between £7,000 and £14,000, while a ground source heat pump can cost between £15,000 and £35,000 to buy and install. Add to this any decorating that might also need doing following the installation and £5,000 is not going to go far. Such a scheme is only ever going to appeal to wealthier homeowners or those who are particularly eco-conscious.
Given we are in a cost-of-living crisis, with Government figures showing there are 3.26 million households in England living in fuel poverty, one might argue the funds would be better spent elsewhere.
Let’s hope it has better success with the launch of its Great British Insulation Scheme, which was due to launch at the start of April but has already been delayed to what is believed to be late summer. The scheme is designed to help vulnerable households and those with the lowest rated EPC properties and offers funding for simpler measures to reduce bills and energy loss, such as loft insulation and cavity wall insulation.
As with green mortgages, a property’s EPC will form the basis by which all parties work from.
Consequently, the need and demand for energy assessors and EPCs will be huge and herein lies the risk of should we say some ‘unscrupulous’ assessors. We are already seeing stories advising homeowners how to best challenge their EPC and it is not hard to foresee where issues might arise.
Given the lifespan of an EPC is only ten years, those carried out several years ago run the risk of being inaccurate - especially for those properties which have been renovated. However, there shouldn’t be a need to challenge a modern-day rating, if carried out by a qualified and trusted assessor.
All our surveyors have been trained to be energy and retrofit assessors and the EPC scoring is as regimented and evidence-based as our valuation methodology, if not more so.
Nevertheless, a lot will depend on the assessors’ knowledge and experience and there is unlikely to be a huge amount of oversight that goes into checking an EPC’s accuracy.
Until we see the EPC reformed and updated, it is in many ways acting as more of a hindrance than a help to achieving the UK’s net zero goals.
