Homes with the lowest energy efficiency ratings could see their annual energy bills increase by as much as £591 starting today, as the energy price cap takes effect. This significant rise disproportionately impacts owners of older, less efficient properties, which often feature solid, uninsulated walls, single-glazed windows, and outdated heating systems.
According to data from property website Rightmove, a home with an Energy Performance Certificate (EPC) rating of G, the lowest possible, now faces an average annual energy bill of £5,035 under the new price cap. This represents an increase of £591 from the previous rate of £4,444. In contrast, a property with an A rating is projected to see an increase of £65, bringing its annual bill to £563. Homes with a D rating are expected to face an additional £284 per year.
Rightmove data indicates that 52 percent of homes in Britain have an EPC rating of D or below. While improving energy efficiency through measures like better insulation, updated windows, or new heating systems can mitigate these costs, the upfront expense of such upgrades is a significant concern for many households, often taking years to be recouped through lower bills.
Property Value and Buyer Demand
Evidence regarding the impact of energy efficiency on property value is mixed. Nationwide data suggests that homes with top energy efficiency ratings (A or B) are only about 1.6 percent more expensive, or roughly £4,500, than similar homes with a D rating. However, experts observe a growing trend in buyer preferences.
Colleen Babcock, a property expert at Rightmove, noted a 35 percent increase in demand for homes with the highest EPC ratings in March compared to the previous year, coinciding with global uncertainty. "It’s a clear sign that when the cost of living becomes more uncertain, energy efficiency moves higher up the priority list," she stated.
Mark Wiggin, Director of Mark Wiggin Estate Agents, added that inquiries about EPC ratings have become commonplace, a shift from before 2022. He observes increasing demand for modern, energy-efficient homes, while properties with poorer EPC ratings are becoming less desirable, a trend he expects to continue.
Energy Price Cap and Future Projections
The national energy price cap has risen from £1,641 to £1,862 per year for a typical home, an increase of £221 annually or £18.40 per month. This calculation is based on average energy usage for a three-bedroom home with two to three occupants. Households with higher consumption will incur greater costs. Those on fixed energy tariffs are not directly subject to the price cap, and some deals may offer lower rates.
Independent analysis from Cornwall Insight suggests a slight decrease in the price cap to an estimated £1,849 from October, attributed to stabilizing wholesale energy markets amid easing geopolitical tensions.
EPC certificates, which rate homes from A (most efficient) to G (least efficient), are valid for 10 years and cost between £60 and £120 to obtain. While they are a consideration for buyers and tenants, some industry professionals question their accuracy. Nathan Emerson, CEO of Propertymark, a membership body for estate agents, stated that the current EPC methodology does not always reflect a property's actual performance, particularly for older homes, and called for reforms to provide a more accurate assessment and practical improvement roadmaps.