Since their introduction in 2007, Energy Performance Certificates (EPCs) have been required when a property is constructed, offered for sale or to let. As the regulatory landscape shifts, we are now seeing a variety of lenders take greater consideration around how they approach energy efficiency and EPCs from a product and risk perspective. In addition, the EPC is currently undergoing improvements via the government’s EPC action plan.
Within this action plan, the government has begun preparations to hold a consultation on potential changes to the EPB Regulations in 2022. The premise behind this is to progress a number of actions relating to a system that delivers accurate, reliable, and trusted EPCs.
The government is developing proposals for possible inclusion in the consultation to:
· Further the use of, and access to, data to improve the audit of EPCs to raise their quality (Action R3)
· Inform our future domestic policy including considering revising penalty rates (Action R11)
· Inform our future domestic policy on EPB compliance and enforcement (Action C2)
· Take forward options for improved oversight and accountability of the whole EPC system, which have been discussed with stakeholders (Action R13)
With UK housing responsible for a reported 23% of the country’s total greenhouse gas emissions, it’s clear that we, as an industry, have a vital role to play in reducing this amount. And how this action plan, and any other initiatives, is reflected in the context of valuations will prove a key focal point for our industry moving forward.
This issue was at the forefront of our recent Game Changer webinar series and polls of over 400 property professionals generated some interesting responses. For example, 62% of residential property professionals don’t believe that Energy Performance Certificates are the most suitable method to help reduce emissions in our homes. In response to the question – does the sector require urgent upskilling in this area? A vast majority (92%) thought this to be the case, with 8% suggesting that the sector was sufficiently skilled.
When asked the question do you consider EPCs to be reliable? 57% said sometimes, 21% responded rarely, 20% answered usually and 2% reacted by saying never. Interestingly, in a separate question, almost three quarters of respondents (73%) thought that EPCs are hardly ever reflected in sales prices, 18% implied they are never reflected in sales prices, 8% countered that they are regularly reflected in sales prices but not one respondent was of the opinion that they were always reflected in sale prices.
Finally, on the topic of consumers understanding EPCs, 80% suggested that consumers partially understand them, 12% pointed out that they did not understand them at all while 8% implied that they had complete understanding.
This data really does help outline how a range of property professionals view the current performance, reliability, the relationship to sales prices and consumer understanding of EPCs. The results also suggest that the government’s aim of delivering accurate, reliable, and trusted EPCs is something that needs to happen sooner rather than later. And I’m certainly in full agreement with this sentiment.
