A business analyst is warning owners of older properties that the value of their assets may be cut if energy efficiency becomes a more central factor in estimating future asking prices.
Sarah Coles, an analyst at consultancy Hargreaves Lansdown, is warning that owners of older properties “have a mountain to climb if they’re going to hit the government’s energy efficient targets.”
She makes her comments after data from the Office for National Statistics shows that newer properties are - predictably - better for energy efficiency than older ones.
The ONS report says modern properties built after 2012 score an average of 83, putting them in EPC band B, while those built before 1900 have an average score of only 54 in England and just 51 in Wales - firmly in band E. Those built from 1983 onwards have an average rating of band C or higher, and those built before fall short of government targets.
Overall, houses are less efficient than flats, with semi-detached properties in England and Wales scoring an average 63; detached properties are 63 (England) and 62 (Wales). Flats and maisonettes are rated an average of 72.
The government is targeting as many properties to hit band C as possible by 2035 - band C begins at 69 - and with that in mind Sarah Coles says: “A typical Victorian property is faced with insulating its way from an average band E to an average band C. This could prove too expensive, leaving the owners of these properties out in the cold.
“The government has set an energy efficiency goal of getting as many properties as possible up to band C by 2035. These figures show that for older houses, especially those built before 1900, the cost of these improvements may well be too much for homeowners.”
Coles continues: “The government is considering encouraging people to take action by manipulating the mortgage market. Mortgage lenders could be forced to target lending on more efficient homes, and encouraged to provide additional funds so people can make improvements.
“They won’t force anyone to make changes where they are unaffordable. However, if you’re living in a Victorian semi with a rating of band E, you may well struggle to find a mortgage lender offering a competitive deal. When you come to sell, this could mean buyers are thinner on the ground, which is likely to depress the price.
“To make matters worse, the research also showed the energy costs for people living in older homes is significantly higher, so those who are struggling to downsize from a big Victorian property face eye-watering energy bills while they wait for a buyer.”
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