The residential property market is showing remarkable resilience despite the economic turbulence we see.
Average house prices – traditionally considered the bellwether of market health – are still rising.
The national figure rose 1.1% in April and now stands at £286,079. In Portsmouth the average is a little higher, at £293,173.
As well as prices, there are other positive signs. Housing transactions and mortgage approvals remain above pre-pandemic levels and there is continued growth in new buyer enquiries.
But can this comparatively bright picture last during the current period of rocketing inflation, the highest for 40 years, and rises in interest rates?
Albeit from a long period of low borrowing costs, rate rises will see mortgage payments go up for millions of people on variable rate deals.
And the impact of inflation at 9% and set to rise further, coupled with soaring energy prices, will only add to the pressure on household budgets.
As a result, prospective buyers or tenants will be especially focused on the running costs of a home, perhaps like never before.
Homeowners looking to sell or let their properties can take it for granted that the squeeze on the cost of living will increasingly focus minds.
One key recommendation in the midst of all this is to ensure the energy performance of your property is as good as it can be.
And if you haven’t already, it’s time to start thinking about that right now.
It is your legal responsibility as a seller or a landlord to organise what is called an EPC, or Energy Performance Certificate, for any residential property that is to be sold or let.
If you don’t provide one, you could be fined up to £5,000, a figure the government is proposing to raise to £30,000 from 2025.
But aside from the mandated requirement for a certificate, we strongly believe it is a good thing in itself to ensure robust energy performance. It is better for the environment and makes living in the property more affordable.
An EPC is designed to provide information about current energy use and the estimated costs of heat, light and hot water for the next three years.
Certificates have to be completed by qualified assessors who calculate scores based on efficiency. As well as a current rating, the assessor gives a potential score that could be achieved if recommendations for improved energy use are implemented. These might include measures such as a more efficient boiler, solar panels, better loft insulation or the installation of a heat pump.
Grades go from ‘A’, the most efficient, with 92+ points, down to ‘G’, the least efficient, with between one and 20 points.
The main criteria informing the scores are the amount of energy used per square metre and the level of carbon dioxide emissions from the property in tonnes per year.
It’s important to note that an EPC is not the same as an energy bill. That’s because an EPC specifically excludes the energy used for running appliances such as a fridge, freezer or cooker.
In the rental market, Buy to Let purchasers should be aware that they cannot rent out a property that has an ‘F’ or ‘G’ grade.
From 2025, that will change to ‘C’ grade for new tenancies, followed by all tenancies in 2028.
EPCs and property value
The good news is that most commentators, including MoneySuperMarket, agree that a higher EPC rating will generally correlate with a higher house price.
At a time of such huge pressure on personal budgets, a high EPC score makes the property more attractive to prospective buyers or tenants because it offers reassurance that energy is being well managed and costs can be affordable now and in the future.
If you would like more information on how best to prepare your home for sale or rent, contact us here at Chinneck Shaw. You can also stay up to date on latest developments in the property market by receiving our quarterly newsletter.