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Homebuyer & sellers' guide to reading an EPC: part 2

Posted by Linn Rafferty on 25 November 2011 at 10:30 am

Energy performance certificate (EPC) gives information that can be very helpful to both homebuyers and homesellers, but only if you know what to do with it. This article should be read in conjunction with previous guides to reading page one of the EPC for the buyers and renters, and for sellers. I will cover for rental properties a future blog.

The rest of the EPC contains two particularly important areas: firstly, the home’s current features, and secondly, recommendations for improving the home.

The current features

This is a table that lists the most significant energy-related features of the property, and gives them a star rating. 1 star means the energy performance of the feature is poor, and 5 stars means excellent.

The star ratings are based on the energy efficiency of the particular feature, ie how much does this part of my home affect my fuel bills? It is therefore a rating based on cost, and it compares the systems or constructions in your home with those typically found in other homes.

If a feature is given a poor rating in this table, this does not mean that the system is of poor quality, poorly manufactured or poorly installed – just that it is less efficient than other systems or constructions that are generally used in homes. Where a home was built many years ago, the construction methods and installed systems were not as energy efficient as those now commonly available.

Unsurprisingly, this table often shows lower star ratings for some features of older homes, such as the wall or roof construction.

Another reason for lower star ratings can be that the installed system uses an expensive fuel. For example, a hot water or heating system using electricity will rate lower than a system that uses mains gas, due to the higher cost of electricity.

For some features, the rating will state that it is assumed. This does not mean that the domestic energy advisor (DEA) has made an assumption. The DEA is not allowed to drill into walls or lift floorboards, so some features have to be assessed by assuming that they are typical of standards that applied when the home was built. Floors are a good example of this, and the software assumes that they perform to the typical insulation standards of their day, unless the DEA has been shown evidence that improvement work has been carried out.

The recommendations

The recommendations on an EPC are presented in two ways – firstly as a table, followed by a description of each recommendation. This gives more information about each energy efficiency measure that has been recommended, and explains in general terms how it would improve the energy efficiency of the home.

The table of recommendations is quite complex and some explanation may help. The four columns, in turn, list the recommendation, the likely costs saving it would make in this home, the energy efficiency rating after improvement, and the environmental impact rating after improvement. The first recommendations are the most cost effective, and they are identified as lower cost measures. These are the ones you will want to implement as soon as possible in any programme of improvement work on this home.

The higher cost measures and further measures will be less cost effective, but as the price of energy increases, and some energy efficiency measures become cheaper to install, this balance is changing. The likely cost savings will give you a good feel for whether the result on your energy bills will be worth it. However, you should bear in mind that these are typical savings, so you may achieve greater or lesser savings depending on how you use your home.

You should also consider that these cost estimates are based on fuel costs at the time the EPC was produced. Since EPCs are valid for 10 years, these estimates will always be based on fuel prices that are lower than today’s charges – so the tendency is for higher savings to be available. Finally, the savings don’t include any payments you could receive via the Government’s feed-in tariff or renewable heat incentive schemes.

What should I do with the Energy Performance Certificate?

Well, of course, this depends on whether you are selling or buying.

If you are selling

You may think that because you are moving out, there isn’t much point in taking much notice of the EPC you’ve paid for. It’s often said that buyers don’t consider the EPC very much when choosing a home. But, with energy prices on an upward spiral, this is changing. Valuation surveyors are also now being encouraged to take energy performance into account when valuing homes. Since sellers rely on buyers having access to mortgages, the possibility of improving a property’s valuation in this way may become more important to sellers in the future.

So the EPC is relevant, and you could consider making some basic improvements recommended on the EPC prior to moving, so that you can show prospective purchasers that you have made the home cheaper to run. The fact that you have taken steps to reduce the home’s environmental impact may also be important to some buyers.

If your DEA is accredited with the NHER scheme (ask them) then they can provide you with a professional report about your home’s energy performance to supplement the official EPC. This report explains more about the EPC, with special reference to your home’s particular features, and can be used as part of the marketing material. If your agent doesn’t know how to use your home’s good energy performance to market your home, encourage them to use this report to do just that.

If you are buying

Firstly, and this is most important, don’t accept the Agent’s advice to put it away with the rest of the paperwork without first reading it carefully!

Remember the Agent is appointed to work for the seller, to get the best price for their property, so there’s no particular reason why they should give you the best advice on what sort of home will suit you. If you received the EPC before you decided to buy this home, take a look at the rating before you make your final decision, and think hard about how affordable it will be as energy prices rise.

That’s not to say that a low rating should put you off buying – you will want to balance this with the positive features that attracted you to this home in the first place. However, as I explained in my previous blog, if the energy efficiency rating is low (say, E, F or G) and the potential for improvement is also low (say, an improvement of no more than 10 SAP points) and you want to be warm at reasonable cost, then this home is probably not for you.

So, if you are thinking of buying a home with a low energy efficiency rating, the next thing is to take a look at the recommendations. If the rating can be improved cheaply, by acting on the lower cost measures, then that’s good; depending on the time of year, you may even be able to improve the home quickly and cheaply, before the winter sets in.

Unfortunately, not all homes can be improved without spending a LOT of money. If significant improvement in the rating requires you to act on the further measures, like solid wall insulation and double glazing, you will be looking at upwards of £10,000 to achieve a warmer home.

Recognising the difference between a home that can be cheaply improved, and one that will need this sort of money spending on it, is possibly the most important skill that the DEA has - and one that could save you from being too cold for comfort in your new home.

About the author: @linniR is a consultant, a freelance writer and a Domestic Energy Assessor accredited with the NHER scheme, and she enjoys all three.  She tweets regularly on issues relating to energy efficiency and renewables and provides consultancy, especially in relation to training needs.

If you have a question about anything in the above blog, please ask it in the comments section below.

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Comments

10 comments - read them below or add one

Miguel

MiguelComment left on: 18 August 2015 at 2:27 pm

I am a domestic energy assessor. Answering the last question, it is unlikely a high performance external door makes a big impact in the rating. Usually it will be 1 or 2 points over 100, but it may be a bigger difference if we are talking about a small property. Remember to have documentary evidence during the assessment, because otherwise it will not be possible to include it in the report, because our job is subjected to audit. Accepted evidence includes an invoice or manufacturer literature.

Talking about the focus of the EPC about energy costs, sometimes I think another approach could be positive. I spend most of my time gathering evidence for my certification body to generate a report which could not match with reality, and almost nothing giving energy advice. This is natural taking into account that a person who commisions the EPC is not going to live in the property. 

I would change the EPC for a visit to a house recently bought or rented, and I would provide specific advice in situ, regarding behaviour and possible installations and impact. 

Still, EPCs are useful to provide information for tenants and buyers, and the fact of having so much information about the housing stock can help to deliver resources where are most necessary.

 

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evangilmer

evangilmerComment left on: 4 January 2015 at 10:33 am

Hi, is the quality of your front door taken into account in the EPC? I will put my house on the market in April and was wondering if it was worth replacing the old front door as it is quite draughty 

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Frazer Hamilton

Frazer HamiltonComment left on: 29 November 2014 at 1:41 pm

Has there been a review of the impact of a Bio Mass bolier as a replacement for oil in house pricing.  There is clealry the potential for negative impact and with oil prices falling the potential for higher comparative cost also.

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Cathy Debenham

Cathy DebenhamComment left on: 3 November 2014 at 2:29 pm

Hi Graham

Are some of the walls pitched? I'm asking as we had inadequate info on our rooms in roof on our EPC. See the picture in this blog. In our case the walls insulated, the ceiling is insulated (in the loft), but the pitched bit in between isn't. And because heat finds the easiest way to escape, there's plenty of room for it to do so, and we get a low score for those rooms (but not suggestions of what we can do about it). I can't answer the specifics about the scores given, as I'm not an assessor, but I think the attic rooms are rated on the walls, and that the loft insulation is rated separately.

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Graham Marshall

Graham MarshallComment left on: 17 October 2014 at 10:25 am

My EPC shows three ratings for the energy performance features of the roof:

Pitched, insulated at rafters 3 star Pitched, no insulation (assumed) 1 star Roof room(s), no insulation (assumed) 1 star   The attic (roof rooms) use as their ceiling the rafters which are rated at 3 star. They cover approximateky 50% of the floor area of the attic. The rooms are walled and uninsulated which, I think explains the apparent confusion of having three ratings for the roof. What I do not undestand is why there is no oveall rating and why the roof rooms which benefit from all of the 3 star insulation are rated as uninsulated.

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Tasha Kosviner

Tasha KosvinerComment left on: 19 March 2014 at 12:47 pm

Hi Skye

I've examined your problems in more detail in this latest blog.

I hope it helps!

Tasha

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Tasha Kosviner

Tasha KosvinerComment left on: 3 March 2014 at 11:54 am

Hi Skye It does sound as though you've had a nightmare and I sympathise with you. I've talked to the NHBC about your draughty doors and windows and your problems with condensation. They have said that if you give them your contact details they'll get in touch with you to discuss your specific problems further. Why don't you email me on tasha@yougen.co.uk with your contact details and I'll pass them on. In relation to the EPC, I am doing some investigation and I'll post more info soon. 

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skye

skyeComment left on: 8 February 2014 at 12:05 am

My epc reads from 2009. It states approx bills £128 lighting,£43  heating £117 hot water.

  I thought this to be a good guide with an increase since the date published.

  It states underfloor heating from central heating, i assumed this as it was advertised the same on estate agents website.

  When i moved in December the 6th i soon realised it was electric heating underfloor. ok a little extra cost. The house is only 7 years old, so i thought it still to be ok after viewing this epc.

   To my dismay, before my first bill the meter seems to be doing overtime. Approx 150kw/h over four days. This does not include having the whole house on or having it on for sustained periods.

The upstairs rooms are cold, windows are covered in condensation, which is causing mould and pools of water on window sills.

The house is timber kit internal so should be fully insulated.

  I have contacted NHBC but they stated not structural so cant help. Also contacted Dunelm holmes who built house, AGAIN only 7 years ago. They say cant do nothing. To top it off the 3 sets of french doors are passing drafts badly and my sons room even leaks in from outside when it rains.

  There is other problems too but i wont go on anymore.

Please help and give me some advice, i feel like i have been conned.

thanks

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Linn Rafferty

Linn Rafferty from JTec Energy PerformanceComment left on: 27 November 2011 at 1:27 pm

Yes absolutely, most people are not interested in the Environmental Impact Rating, and the good news is that it will be dropped from the EPC from next April following a report from Consumer Focus (see my earlier blog about this, at http://www.yougen.co.uk/blog-entry/1690/EPCs+should+make+financial+benefits+clearer+says+Consumer+Focus+/

Of course, we knew this was the case from the early days of our work on the EPC design.  The focus groups told us then that it was financial savings they were interested in - and if that also meant helping the planet, that was a nice thing to have, but it was secondary to them.  Unfortunately, due to political pressures to base everything on carbon savings, the second graph was included in the EPC - and all it did was to confuse the message.

I'm pleased that this is going to change next year, and the new EPC design will be along the lines suggested by Consumer Focus - providing more information on what matters to consumers.


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NorthGlosEPC

NorthGlosEPCComment left on: 26 November 2011 at 10:34 pm

Hello @linniR,

I too am an Energy Assessor (Stroma accredited). My congradulations on a well compiled blog explaining the usefulness of energy performance certificates and how both buyers and sellers can furnish themselves with information that can potentially save them a small fortune. That is if they actually read through the thing, but like you I think people will start taking more notice as energy costs continue spiralling upward ever more quickly, as I fear they will.

One observation I would make regarding current Energy Performance Certificates is that while some people show interest in the economics of energy efficiency I have yet to meet anyone showing the slightest interest in the Environmental Impact Rating. This suggests that while I'm sure no one actually wants to cause environmental damage to the planet it's the economics, or their bank balance that is most important to people.

Economics being the issue of greatest interest to people (if you agree) what would your opinion be (and anyone elses opinion) to any proposal to:

Remove the environmental impact rating from the EPC?

Focus totally on efficiency so as to reduce energy cost, focus totally on economic efficiency?

Make advice tailored to give best efficency as a ratio of improvement measure cost, what I'd call best cost saving efficiency measure for lowest investment?

These proposals are consistent with my own experience where I get asked for an opinion as to what I think the best approach for any particular property should be, and an opinion on the merits of things like Solar PV, Solar hot water. An honest answer to the later question has to be that these measures do work, they do help reduce Co2 emissions but the economics are such that the payback on investment is not exactly short. Motives for going that way have to be more environmentally based than economic, especially with new levels of feed in tariff.

Thing is that in my experience people are far more interested in the short term effect on their bank balance than the longer term effect on the climate. Should we therfore not make The EPC reflect this more? Might that not at least go some way to improve the effectiveness and credibility of the EPC?

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