In a world where energy costs really are becoming somewhat eye-watering and we have experienced a significantly dry summer that many have put down to climate change, energy efficiency really is a hot topic.
How does this apply to homes and mortgages?
The first point to note is that the more efficient your home is, the lower your energy bills will be (because you’re using less energy) and the less CO2 will be created. We’re talking about things such as insulation, double glazing, solar energy and more.
An EPC Certificate is, simply put, a certificate that formally summarises the energy efficiency of buildings. With a rating between A – G, the EPC certificate also includes tips about the most cost-effective ways to improve the energy rating of a property (commercial and residential.)
EPC Certificates tend to last for 10 years and look like the image below.
When you are purchasing a property, your mortgage lender will generally require a copy of an EPC certificate as part of their due diligence.
With the push towards net zero carbon emissions, you may be able to get a slightly better rate if you have a higher rating (such as a C as opposed to an E). Some lenders will also not lend over 75% of the property’s value (75% LTV) if the rating is below a C.
If you are purchasing a buy-to-let property, an EPC is required by the mortgage lender in much the same way, however, it is also worth noting that you are unable to let a property where an EPC rating falls below an E. With the drive to net zero, there are also proposals going through Parliament to increase this to a minimum rating of C.
When viewing a property, it’s well worth asking about the EPC rating as this could guide any offer you make. You may also want to consult your mortgage broker before viewing to get any advice around EPC ratings and where to pitch an offer.
Many agents display the property’s EPC rating when advertising, but if you are unable to find it you can search the Government’s database for free here.
If you are moving home or purchasing your first home, then do drop us a call on 01322 553 282 or contact us online.