The UK government set out targets for the country’s future energy use in a white paper published in 2020. It sets requirements for the future energy efficiency of properties, so investors buying UK property should also pay attention to a property’s Energy Performance Certificate (EPC) rating, which directly affects the property’s value. Some mortgage lenders also set requirements around a property’s EPC rating, and too low a rating may mean a property cannot get a mortgage at all. Here is what the UK’s EPC rating system is and why it has become so important.
The UK Energy White Paper
In 2019, the UK ran a nationwide consultation on the energy efficiency of properties, and published its energy white paper in 2020, setting out an initial ambition to upgrade as many private rented homes as possible to EPC Band C by 2030, and non-domestic properties to EPC Band B where possible. Following further consultation, the UK government confirmed in January 2026 a single compliance date of 1 October 2030 for private rented homes in England and Wales to reach EPC Band C (or equivalent), with a £10,000 cost cap and a 10-year exemption once reached; the current legally binding minimum remains EPC Band E (in force since April 2020). That means owners of properties currently rated below Band C or E are likely to need extra capital to raise their property’s EPC rating.
Official UK energy target: https://bit.ly/3IVKxM0
What Is an Energy Performance Certificate
An EPC is a four-page document that sets out a property’s energy efficiency on a seven-band scale from A to G — A being the most efficient — using a traffic-light-style color scheme, with the most energy-efficient band shown in green. The EPC gives an indication of what it costs to heat and power the property. It also includes recommendations for energy-efficiency improvements, along with the cost of making them and the potential savings for the homeowner. A seller or landlord is generally required to provide an EPC within 7 days of a property being sold or let. Whether or not an estate agent or letting agent is used, they are expected to handle the EPC on behalf of the seller or landlord. An EPC can only be issued by an accredited assessor, so anyone seeking one should carefully check the assessor’s credentials. An EPC typically costs around £35 to £100.
The Benefits of a Higher EPC Rating
Because the EPC reflects how efficiently a property converts energy for heating and power, a higher rating generally means lower energy use. Take heating as an example: the EPC calculates the energy (in kWh per year) used to heat the property’s space, which has a direct effect on the owner’s electricity bill. A higher-rated EPC property can therefore save the owner more on electricity and water bills, making it the better long-term choice. A lower-rated property means higher annual water and electricity costs for the owner, and it may also need extra spending before 2030 to raise its EPC rating. The EPC rating also directly affects property value. Research from the Department for Energy Security and Net Zero (DESNZ) — the successor to the former Department for Energy and Climate Change, abolished in 2016 — and an independent study by MoneySuperMarket both show that an EPC rating can significantly raise a home’s value. In fact, moving from Band G to Band D can raise an average UK home’s value by up to 14%. UK banks also factor a property’s EPC rating into mortgage approval, and the most common effect is that a property rated below Band C cannot get a mortgage at a loan-to-value ratio of 75% or higher.
Official UK energy research report: An investigation of the effect of EPC ratings on house prices
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