An energy performance certificate (abbreviated to EPC) provides an easy to understand and easy to compare rating for the energy efficiency and cost of running a property.
If you’re selling a property or renting one out, you are required to obtain an EPC so that potential buyers or tenants know in advance how much energy they might consume while living in the property. (You may wish to learn about the other documents you will need when selling a property or about what the conveyancing process invovles for sellers.)
The key information that a certificate gives is an overall grade between A and G, where an A-grade means that the property is highly energy efficient, and a G-grade means that it is poorly efficient.
In addition to the letter, a mark between 1 and 100 is also provided where 100 is the best result.
Between the grade and the mark, it becomes easy for the reader of the report to understand how efficient the property is compared to other properties.
The current average grade of a residential property in the UK is D.
Why was the requirement to obtain an EPC brought in?
The requirement to obtain an EPC came into effect in 2008. The aim of the legislation is to force property owners to increase the efficiency of all residential and commercial buildings over time by making it illegal to sell or rent properties that do not make a particular grade.
Nearly 40 per cent of the UK's energy consumption arises from the way in which our 25 million buildings are lit, heated and used. Even comparatively minor changes in the energy performance of and the way we use each building would have a significant effect in reducing energy consumption.
When is an EPC not needed?
A property is unlikely to have an Energy Performance Certificate if any of the following are true:
The property is a listed building.
The property has never been rented under a tenancy agreement (such as an assured shorthold tenancy) or a commercial lease.
The property has not been sold since 2008.
Additionally, there is only a requirement to have a new EPC prepared if one hasn’t been prepared in the last 10 years. But property owners who have made substantial improvements in order to improve the efficiency are likely to want to have one prepared in order to show the value of those improvements.
How much does an energy performance certificate cost?
Energy performance certificates are written at a cost to the property owner. The fee charged depends on a number of factors, including who carries out the work, size of the property and its location. The minimum amount that can be judged from EPC document is £35.
Landlords and property sellers cannot charge for or sell the report to anyone else. Doing so is a criminal offence and can be punished with a fine of up to £200.
To improve the value of the certificate to the owner, higher value services tend to give more detailed recommendations about how the rating (the energy performance) can be improved.
Your mortgage lender is also likely to ask for the EPC before deciding whether to lend against the property.
However, obtaining an EPC is not the only cost you will incur when selling your home. Therefore, it would be wise to read up on other costs associated with selling your home.
The National Register
Property owners can voluntarily record an EPC on the National Register, the purpose of which is to allow other interested parties (such as potential tenants or neighbours or new owners) to trace the previous certificates relating to a property.
Improving a property to increase an energy performance rating
EPC report should quantify the energy efficiency of a house or flat reasonably accurately.
It takes into account the cost to heat and light a space, and then whether the exterior fabric of the property allows heat to escape easily. In doing this, it considers the construction and location of the property and energy related fittings including heating systems, insulation and double glazing.
If the rating of your property is below the current minimum standard, you’ll need to make changes to the property to improve it before you can let or sell the property. For example, you might install a new, more efficient boiler, or you might increase the insulation under the roof or install double glazing. The report gives measures that can be carried out reasonably inexpensively in order to improve the EPC rating.
An accredited Domestic Energy Assessor can then be commissioned to assess the new efficiency, and his or her report is used to apply for a new EPC.