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How Energy Efficiency Impacts Property Value

5 min read
Updated: 13 Sep 2022

Improving your home value through energy efficiency

If you are looking to improve the value of a property, there are a number of options available. Cleaning, redecorating and even extensions and remodeling are all commonly considered – but investing in the properties energy efficiency rating can also be a profitable way to bolster the asking price.

Find out how much a favourable energy efficiency rating can add to the value of your property, and ways in which you can improve an average "D" rating to a valuable "A".

What is the Energy Performance Certificate (EPC)?

The Energy Performance Certificate (EPC) is required when selling or renting a property and includes a rating given to the property on a scale of A to G, measuring the quality of the property’s energy efficiency.

An energy efficiency report also includes recommendations on ways a property can be improved to cut fuel bills, improve efficiency, and reduce carbon emissions.

How a high EPC rating increases property price

Based on average property prices in England we are able to see a correlation between a stronger energy efficiency rating and a higher house price, the graph below highlights the price increase as a result of raising your EPC from a G rating through to a higher A ratings, where property value can be as much as 14 per cent higher.

energy efficiency savings table

Further analysis shows some regional difference in the median increase in property price, when the EPC rating is improved from a D to A/B, across each region of England

Energy efficiency house price table

Homes in the North East sees the greatest percentage increase in value, where an improved efficiency rating sees property value increase by 12.2 per cent which equates to £16,219.

However, as a result of a higher average property prices the South West sees the highest monetary increase from an improved energy efficiency rating with the average property value increasing by £19,576, an improvement of 7.7 per cent.

Energy efficiency house prices by region

A closer look highlights the 5 cities that offer the biggest improvement in property price when the EPC rating is increased from a D to A/B with Lichfield in Staffordshire coming out on top. Property prices here can be increased by as much as £24,766.

Energy efficiency house prices cost difference table

How energy efficiency is calculated for an EPC

How is EPC calculated?

An energy assessor will conduct the complex calculation for an EPC. Factors which contribute to the rating primarily include the type of construction of the building, the uses of different areas of the building, any heating, cooling, ventilation, and hot water systems used, as well as the lighting.

The calculation compares the carbon emissions of the building being assessed with a reference building of the same size, structure, and usage, which is constructed to a similar, specified standard.

How often is EPC renewed?

An EPC is only required when a building is constructed, sold, or rented out. Property advertisements must include some description of an EPC rating or the certificate itself. Unless major renovation work is carried out on the property the energy performance certificate lasts up to 10 years.

In cases where energy isn't used to control the temperature of the building, there's no need for an EPC at a

5 ways to improve your homes energy efficiency

1) Install insulation: Installing cavity wall insulation not only offers a chance to improve the energy efficiency rating, but could also save you up to £160 a year while you live in the property.

2) Lagging jackets: A "lagging jacket" insulates your water pipes and greatly improves the efficiency of the hot water tank.

3) Light bulb replacement: Something as simple as switching to energy-saving bulbs instead of traditional ones can improve home energy efficiency for minimal effort.

4) Upgrade your boiler: A newer, more energy efficient boiler can have a significant effect on the energy consumption of your property.

5) Review your EPC: An existing EPC offers a guide to some specific steps on how the energy consumption of your property can be reduced.

Sources & Methodology

The median EPC rating across Wales, Scotland, and England is a D.

In order to show examples of how much homeowners could increase the value of their property, we have increased the average price of properties in each area by the factor of increase from a D EPC rating to an A/B EPC rating.

The results for the South East were not statistically significant and thus have not been adjusted. For the East of England, results were not statistically significant for increasing ratings from a G to a D - as this prevents calculation, an average between the improvement from G to F and from G to C has been taken to use as a factor for working out the improvement from D to A.