EPC ratings are becoming more significant in the mortgage market. While most lenders currently lend on properties across all energy efficiency ratings, the landscape is changing, and there are now meaningful financial advantages to buying a high-rated property.
What EPC ratings mean in practice
An Energy Performance Certificate (EPC) rates a property's energy efficiency on a scale from A (most efficient) to G (least efficient). The certificate also estimates annual energy costs and lists recommended improvements.
Typical ratings for Manchester's housing stock:
- Victorian/Edwardian terraces (pre-1920): Usually E or F — solid wall construction is difficult to insulate
- 1930s–1970s houses: Typically D or E — cavity wall construction but often lacking insulation
- 1970s–1990s houses: Typically D — often have some insulation but older systems
- Post-2000 properties: Usually C or B
- New builds (post-2015): Typically B or A
Green mortgages
Several major UK lenders offer green mortgage products — lower rates for EPC A or B properties. The rate advantage is typically 0.1–0.3% over standard products, which on a £200,000 mortgage represents a saving of £200–£600 per year.
If you're comparing a D-rated terrace at £220,000 and a B-rated new build at £240,000, the lower mortgage rate on the new build partially offsets the higher price. Over a 5-year fixed period, the rate advantage could be worth £1,000–£3,000.
The future direction of regulation
Currently, there is no minimum EPC requirement for owner-occupied residential properties. However:
- The government has been consulting on requiring EPC C for new mortgage applications on some property types
- EPC C will likely be required for rental properties from 2028
- Energy efficiency requirements are becoming stricter across the housing market
Buying an E-rated property today carries some regulatory risk over a longer holding period. If you're planning to hold the property for 10+ years, the cost and disruption of future improvements is worth factoring into your purchase price.
Improving EPC ratings
Common improvements and their impact:
Loft insulation (if absent): £300–£700 installed. Can improve a D-rated property to a C in some cases.
Cavity wall insulation: £500–£1,500 for a typical house. Requires cavity wall construction (most post-1920 houses). Significant energy and EPC improvement.
Modern condensing boiler: £2,000–£4,000 installed. Replaces an old heating system and improves the heating efficiency score.
Heat pump: £8,000–£16,000 including installation and any required radiator upgrades. Can move a property from D or E to B. Government grants may be available under the Boiler Upgrade Scheme (currently £7,500 for air source heat pumps).
External or internal wall insulation: £8,000–£25,000 for a whole house. Used for solid-wall properties that can't have cavity wall insulation. The most expensive improvement but with the biggest EPC impact.
This Q&A is for general information. Dom does not provide financial, mortgage or legal advice. Always consult a qualified adviser for decisions specific to your circumstances.