It’s the £330billion question that will plague every homeowner and buyer – but it’s being ignored by the government.
For more than a year, ministers have avoided the question of future rules on energy performance certificates. This seemingly innocuous question will have a huge impact on the housing market – far more than anyone realizes, including ministers.
Their plans will require homeowners to shell out thousands of pounds just to be able to sell or rent their home. If they don’t make the green upgrades, it could render their properties unmortgageable or significantly reduce the price of their home. All this while the biggest cost-of-living crisis in a generation pushes incomes to breaking point.
The owners are the first target. They were told they had to bring their properties into C-band by 2025 for new leases and by 2028 for existing leases. Around two million homeowners will be stung, according to JMW Solicitors, and they will face a total bill of £10billion.
But this is a bigger problem: Under current plans, lenders will need to have an average Band C rating for their portfolios by 2030. People with inefficient homes will pay higher mortgage rates and have more difficult to remortgage. The rules will force 15million homeowners to each spend thousands of pounds on home improvements, according to Halifax, as around 60% of all homes in England and Wales currently have an EPC rating below C.L estate agency Savills has put the bill to bring every property in Britain up to standard at £330billion. The scale of the upgrading program is such that there will not be enough staff to carry out the work.
There are still so many unanswered questions. There could be a £10,000 limit on spending per property, but we don’t know for sure. The government may offer subsidies but has not announced anything yet. There may be exemptions for certain types of goods, but this is unconfirmed. All homeowners know is that they’ll be faced with a green paperwork nightmare in a few years. How can they upgrade – at the cost of thousands of pounds – and follow the rules if those rules haven’t been set correctly?
The government is also ignoring the other elephant in the room: it has admitted that its EPC system is not fit for purpose, but seems to be forcing people to comply regardless. It was designed to reward the use of gas over electricity, but times have changed and the system has not kept up. The result is that it penalizes people who install heat pumps (which run on electricity) – the same expensive devices ministers push on UK homeowners.
We shouldn’t be surprised. Every new green upgrade policy announced crashed and burned. The Green Homes grant was abruptly stopped before it could start. The new boiler upgrade scheme, which offers money for homeowners to buy heat pumps, is limited to helping just 90,000 homes and covers less than half the cost of installation. The chancellor slashed VAT on green upgrades in the spring statement, but costs have risen so much they will barely make a dent.
The government ended its consultation early last year, but we are still awaiting responses.
You can contact Isabelle at [email protected]