Research Shows Significant Difference in Energy Bills Depending on EPC Ratings
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Rightmove Data Shows EPC Rating has Big Effect on Annual Energy Costs
Rightmove’s energy bills tracker reveals a striking difference in energy costs when comparing homes of differing EPC ratings.
An EPC (Energy Performance Certificate) conveys how energy efficient a home is through a rating system. A is the highest rating, showing that the pinnacle of energy efficiency has been achieved, while a G rating is the lowest, suggesting that the home is not efficient and uses energy wastefully. This rating is becoming increasingly important when looking for buy-to-let homes for sale.
By analysing properties recently put on the market, Rightmove has compared households of each EPC rating to observe the differences in average annual energy bills.
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Energy Bills Become Significantly Cheaper as EPC Ratings Improve
The tracker did not include the A rating as the volume of A-rated properties in the UK is currently too low to give a reliable average. Ratings G through to B were looked at, and similar property types were directly compared.
| Property | G Rating | F Rating | E Rating | D Rating | C Rating | B Rating |
|---|---|---|---|---|---|---|
| 1 Bed Apartment | £6058 | £4448 | £2567 | £1701 | £1054 | £695 |
| 2 Bed Apartment | £6853 | £5834 | £3311 | £2159 | £1469 | £1032 |
| 3 Bed Terraced House | £7700 | £5071 | £3330 | £2263 | £1688 | £1586 |
| 3 Bed Semi-Detached | £6877 | £4968 | £3158 | £2301 | £1756 | £1270 |
| 3 Bed Detached | £10052 | £5539 | £3839 | £2764 | £2154 | £1428 |
Source: Rightmove, 2024
When you contrast the highest-rated properties with the lowest ones, the disparity in energy costs is stark. For example, a G-rated 1-bed flat has an average annual energy bill of £6058, while a property upgraded to band B saw average energy costs of only £695. This is a considerable difference, saving the resident or owner of this property thousands of pounds a year.
Significant differences in annual energy costs were also observed rating-to-rating, suggesting substantial savings of hundreds of pounds can be made by upgrading just one EPC band. In some cases, these savings are in the thousands. Looking at 3-bed detached properties, the average annual energy bill is £10,052 for a G-rated property. However, this jumps down to £5539 per year for households rated F.
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The Benefits of Going Green
Making property energy efficient can be a pricey business, so many are reluctant to make changes unless they are sure the costs will be offset somehow. As the above data demonstrates, lowering energy bills is one advantage of upgrading and moving towards safe investments.
Rightmove also states that long-term benefits such as the ‘green premium’ can outweigh the initial costs of making energy-efficient upgrades. The portal’s analysis has shown that homeowners who have improved their rating from F to a C see an average house price increase of almost £56,000, in addition to local house price growth.
Reducing the property’s reliance on fossil fuel heating will also lessen the home’s emissions. ONS data states that 26% of UK greenhouse gas emissions are a product of households, so knowing that your property is as energy efficient as it can be is one effective way to minimise your personal carbon footprint.
Energy Bill Disparities Linked to EPC Ratings
How Can an Investor Make an Eco-Friendly Property Investment?
So, what can a buy-to-let property investor do to make more energy-efficient choices?
One of the simplest ways to ensure your investment is as highly-rated as possible is to opt for a new-build property.
There has been a decisive shift towards energy-efficient property design in the new build sector, future-proofing properties in the case of future legislative changes to EPC requirements. According to Knight Frank, the proportion of new builds meeting the net zero threshold has risen from under 0.1% in 2009 to 4% of houses and 5.7% of flats in 2022. While still quite a low percentage, this is a significant improvement in a short amount of time.
This trend even includes what is known as an ‘eco-property’. This is a development designed with energy efficiency in mind from the start. An example of this is Element – The Quarter, located in Liverpool.
For more UK property investment insights, take a look at our buy-to-let area guides, covering topics like buy-to-let Eastbourne and Chester investment properties.
Research Shows Significant Difference in Energy Bills Depending on EPC Ratings
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