The Property Energy Professionals Association (PEPA), the trade body which represents companies engaged in the provision of Energy Performance Certificates (EPCs), supports the government proposal to encourage, and possibly mandate, mortgage lenders to report on the energy rating of properties to which they are associated

The consultation points out that although our homes are a key part of our national heritage they are generally older than that of the rest of Europe and the potential for improvement in the energy performance of our homes is considerable.

The energy performance of privately owned homes in England, including the private rented sector, now falls considerably below the current standards of social housing, with 8% of occupants in fuel poverty.

Improving the energy performance of privately owned homes is a vital part of government’s wider strategy to decarbonise buildings cost-effectively, in light of the significant challenges posed by climate change.

The consultation seeks views on the government’s proposals to set requirements for lenders to help homeowners to improve the energy performance of their homes.

These proposals would significantly improve the energy performance of mortgaged properties in order to:

• Deliver substantial emission reductions, which will help to meet our Carbon Budgets 4 and 5 and support a decarbonisation pathway consistent with our net zero target
• Increase the quality, value and desirability of homeowners’ assets, while reducing energy bills and ensuring warmer homes
• Help pave the way for the UK’s transition to low-carbon heating by reducing demand and preparing homes for the installation of low-carbon heating measures
• Support investment in high quality home retrofit jobs and skills in the supply chain across England and Wales and
• Provide greater energy security, through lower energy demand on the grid, and reduced fuel imports.

PEPA has responded to this consultation by supporting both its aims and many of its recommendations, although we did alert to some potential unintended consequences and how they might be overcome.

In summary PEPA agreed with the target of averaging EPC band of C by 2030 and these targets should be mandatory.

It recommend the government provide clarity on its ambition for this legislation as to whether it is to reduce spend on energy (based upon the EPC rating) or the carbon emissions (based upon the environmental impact rating), as they can be mutually exclusive.

PEPA also suggested the government gave special consideration to lenders who have a disproportionate number of older properties on their book, which may be unable to achieve the required rating cost effetely

It proposed that where a valid EPC does not exist then the lender is responsible for obtaining one. And it said reporting on data up to 10 years old could be misleading and that the validity period of EPCs should be reduced to three years

PEPA welcomes this government consultation which aims to provoke lenders to become more actively involved in improving the UK’s property stock in regards to energy efficiency.

With such great influence and involvement in the property market, it is inevitable that more intervention is required from lenders to ensure we can continue to progress to net zero carbon by 2050.

Martyn Reed is managing director of Elmhurst Energy and a PEPA board member