Speaking to Mortgage Solutions after the Royal Institution of Chartered Surveyors (RICS) Decarbonising UK real estate report, Trudy Woolf, sustainability director at Legal and General Surveying Services, said EPCs just needed a “few more tweaks”.
She said the scheme was “heavily criticised” because it only provided an estimation of how much it cost to run a particular property with no information on how it was being used. However, she said it was better than some of the tools currently available to determine a property’s efficiency.
She said: “I don’t think scrapping it altogether is the way forward. I think it has its purpose. But it does need to be brought up to date.
“It does need to relate to how somebody’s operating the property rather than an average of what the property might cost to run, which is not really clear.”
Woolf said the EPC needed to provide more detail of how much energy was being used at a home as currently, “people tend to know the energy efficiency of their fridge freezers, more than they do their homes”.
Sustainability premium
When asked whether people would be willing to pay higher prices for homes which were more sustainable, Woolf said there were no signs of this happening yet due to Help to Buy, pent-up demand following the first Covid lockdown and new-build properties causing prices to rise.
She said as things levelled off this year, the sector may start to see this playing on the minds of buyers.
Woolf said as well as thinking of a property’s location, condition and school catchment areas, people could start to wonder how much a home would cost them to run.
As well as being more attractive due to higher energy efficiency, Woolf said homes which had been retrofitted tended to be in better condition overall.
“You certainly wouldn’t want to put solar panels on a roof if it is in poor condition,” she added.
She noted that buyers would look at “old, leaky” properties differently because they would have to consider how much it might cost to add sustainable features.
Surveyors at the forefront of advice
Woolf said people needed to understand how their property operated before risking making any changes which made it less energy efficient.
She said surveyors and valuers were also on hand to help interpret the market, help lenders understand the direction of travel and how to support customers.
Lenders and mortgage intermediaries are already doing a good job of giving homeowners and buyers information on the efficiency of their homes but Woolf said a joined up effort with signposting was required.
She said the sector was working together and “getting there”.
She said any homeowners who were serious about retrofitting their homes would need to get a surveyor to assess the property, inform them of what changes will be most effective or warn them of any implications.
Woolf said homeowners needed to seek advice not just from their mortgage brokers or lenders, but also from their local surveyor.
“We do sit further along that journey, I think we’d love to try and get further up front to understand that property,” she added.
Build understanding
Woolf said people were being incentivised to improve their homes and choose higher rated properties through green mortgage features like cashback and lower rates, but more attention needed to be directed towards older homes.
She said understanding the retrofit industry was important as it was unregulated for the most part, meaning work could be done inadequately or incorrectly.
Woolf said people also needed to know that not all retrofitting was expensive as small changes such as switching out lightbulbs could improve the sustainability of a home.
She added: “It can be little tweaks here and there which make properties more energy efficient.
“Everyone thinks of retrofitting as putting insulation in, moving out of the property and doing lots when actually it isn’t. But you don’t know that until you understand your property and you’ve assessed it to know what needs to be done.
“Older properties could be damaged, so you’re not going to want to put insulation on the walls before you sort any damp issues out. Understand your property, how it operates and what you need to do to get it in a reasonable state of condition before you do anything else. That is going to be key.”
