Guest blog by Peter Hughes, Chief Executive, Gateway Surveyors
Energy performance ratings (EPC) are a hot topic at the moment for banks, building societies, mortgage lenders, surveyors and homeowners.
With the Green Agenda and targets to be carbon neutral by 2050 at the forefront of everybody’s minds lenders, banks, & building societies are all working towards this and as such all have their own lending policies, which have been formed based on their own individual risk appetites.
Some deadlines are expected to take place at some point in December 2025, such as newly rented properties which will be required to have a performance certification of C or above. Furthermore, all existing tenancies will be required to meet the same criteria by December 2028
Gateway Surveyors have been working in collaboration with lender clients to ensure their mortgage valuation reports capture the EPC ratings and the Standard Assessment Procedure score (SAP).
Surveyors are required to follow each lender’s bespoke guidance and their approach to EPC reporting. If the lender requests for the EPC information included within the valuation report the valuer will obtain the property energy performance rating from the government website (gov.uk/find-energy-certificate). The performance rating will be reviewed alongside lender guidance to establish if the property should be declined or valued less until remedial works have been completed to update the property to satisfactory standards. The new EPC certificate will need to be supplied to the valuer to prove the remedial works have been completed and the property meets the lender’s criteria.
This approach naturally has caused some concern for landlords and property owners alike as this will in some scenarios result in remedial works, which could cost up to £10,000 depending on the severity of the works that are required. Some landlords and property owners will need to use private savings to pay for the works or alternatively source additional funds through a further advance or increased rental costs to the end tenants.
The housing stock across England & Wales varies with regards to performance ratings. The median score was 66 in England and 64 in Wales which is equivalent to a band D.
Yorkshire, Humber & the West Midlands resulted in the lowest average scores at 65 and London had the highest at 68.
With these initiatives only expected to become tighter over the coming weeks and months we are recommending that mortgage lenders and advisors are aware of these changes and signpost the requirements as early as possible by checking the EPC website at the initial fact find or application process.
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The views, opinions and positions expressed within guest blogs are those of the authors and do not necessarily represent those of the BSA.