One of the most visible indicators of the UK’s commitment to battling global climate change is the ubiquitous Energy Performance Certificate. This colourful barchart lookalike is not only on electrical appliances but has also featured on every estate agent’s brochure for the last ten years.
Most of us assume that they are a reasonable guide to the amount of energy that we will need to pump into our homes to keep us warm over Christmas and like the new dog, it is with us for life. But it looks like we could all be in for a shock as inconsistencies have cropped up in the system that suggest that pre 1920’s properties are causing anomalies which require a re-calibration of the EPC system.
On top of this from April 2018, any rental property will need to achieve a rating of E or better. With 20% of the housing stock under public sector control and approximately 20% of these properties being below the E rating, this should be seen as a call to action.
Houseprice.AI’s analysis indicates that London’s local authorities have over 110,000 properties that are not just below the EPC rating guidelines, but are also of the age before cavity walls, double glazing, insulated attics and efficient boilers. Continuing to ignore the need to upgrade these properties, is as misguided as buying new buckets, when we really need to spend money on the roof.
Houseprice.AI can also demonstrate that 25% of these properties are in areas where additional investment is also likely to lead to higher than normal ROI’s as the average price per sq ft is in excess of 10% higher than the value of the properties.
In a typical London Borough, we have identified houses in one street owned by the Local Authority which are identical, apart from their poor energy performance, to their privately owned neighbours. Not surprisingly the Local Authority Homes are achieving sales prices of 40% below their real market values. In this street the value range from the highest to the lowest is 200%
Retrofitting the poorer quality housing to achieve an A or a B rating will cost around £15,000 for a typical 3 bedroom home, but could yield a return of 25 to 30% based on rental uplift, as well as saving 50% of the energy bills.
What dog would not be happy in that new home?
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