What Is an EPC and Why Does It Matter When Buying a Home?
If you've started looking at properties on Rightmove or Zoopla, you've probably noticed each listing includes an EPC rating. It's one of those things that's easy to glance over, but the EPC actually tells you something important about the property and the costs of living in it. Here's what to know.
What is an EPC?
EPC stands for Energy Performance Certificate, it's a legally required document that rates a property's energy efficiency on a scale from A (most efficient) to G (least efficient). Every property being sold or rented in the UK must have a valid EPC, and the certificate is valid for 10 years from the date of inspection.
The EPC is produced by a qualified Domestic Energy Assessor who visits the property, looks at things like insulation, heating systems, glazing and lighting, and produces a report that includes the headline rating, an estimated annual energy cost, and recommendations for improvements.
Why does the EPC rating matter?
The headline rating tells you how much it's likely to cost to run the property. A property rated A or B will typically have much lower energy bills than one rated F or G, sometimes by hundreds of pounds a year.
For first time buyers in particular, the running costs of a home are often underestimated. A poor EPC rating doesn't just affect your bills, it can also affect your comfort, with poorly insulated homes often feeling cold in winter and expensive to heat.
EPCs and mortgages
Some lenders are starting to factor EPC ratings into their mortgage decisions. Properties with very poor ratings can be harder to mortgage, and a growing number of lenders offer green mortgage products with better rates for properties rated A or B.
For buy-to-let buyers there's an additional consideration. Properties rented out in England and Wales must currently have a minimum EPC rating of E, and there have been ongoing discussions about raising this to C in future. If you're considering buying a rental property with a low rating, factor in the cost of upgrading it.
EPCs and renovation plans
The EPC report includes recommendations for improvements, ranging from simple changes like switching to LED bulbs through to more significant works like adding insulation, replacing the boiler or installing solar panels. Each recommendation comes with an estimated cost and an estimated improvement in rating.
This information can be genuinely useful when planning renovations. If you're already going to spend money on the property, knowing which improvements will have the biggest impact on running costs and the EPC rating helps you prioritise.
What to check before you buy
When you're looking at a property, take the EPC rating seriously. Ask the estate agent for the full EPC report rather than just the headline rating. Look at the recommendations, the estimated annual cost, and the potential improvement if the recommendations are implemented.
If the rating is poor, factor the cost of any necessary improvements into your overall budget. Some upgrades like adding insulation or replacing an old boiler can be expensive, but will pay for themselves over time through lower bills.
For more on what to look for at the viewing stage, read our guide to 10 questions to ask when viewing a house.
Check any property's EPC online
You can check the current EPC of any property in England, Wales or Northern Ireland directly on the government's website. Just enter the postcode and you can see the rating, the full report and any recommendations. This is useful at the viewing stage if the agent hasn't sent you the full report, and also worth checking before you make an offer to make sure the rating you've been told matches what's on the official register.
EPC exemptions
Some properties are exempt from needing an EPC, including listed buildings where improving energy efficiency would unacceptably alter the character of the building, places of worship, and temporary buildings. If you're buying a listed building, the absence of an EPC isn't unusual, but it's worth understanding what you're taking on in terms of running costs and what restrictions on improvement work might apply.
The full checklist
The Home Truths Guide includes 100+ essential questions to ask at every stage of buying a home in the UK, including specific questions about energy efficiency, running costs and EPC ratings.
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