Buying a home with a low EPC

StinkiPinki

Hi, I’ve had an offer accepted and mortgage approved for a Victorian house with EPC-F. 

I’ve been looking online and noticed that it is likely that the Gov will make it harder to get a mortgage ( and therefore sell my mew home later) for properties lower that EPC-C. 

I don’t want to be trapped in a worthless home. At best the EPC could be improved to D, but due to the age of the house it will never reach C.
So what would happen? My new home would be massively devalued?

thanks

FreeBear

https://www.gov.uk/government/consultations/improving-home-energy-performance-through-lenders

So rather than encourage home owners to improve the efficiency of their homes via grants and alternative funding schemes, the buck is passed to mortgage providers. Don't really know what to suggest, but I can see 19m property owners being mighty annoyed by the prospect (and, yes. I'll be one of them).

AdrianC

That's not quite what's happening...

The government launched a consultation last November to look at publishing lender "league tables" to incentivise improvements in EPC scores. The deadline for responses was February, and nothing's been published yet.
https://www.gov.uk/government/consultations/improving-home-energy-performance-through-lenders

Victorian properties are always going to be in demand, and there will always be a market for lenders to service that demand. It's a small segment of the market. I very much doubt anything will actually change in terms of values. People who want characterful older properties will still be happy to look for them.

We once viewed this house...

https://find-energy-certificate.digital.communities.gov.uk/energy-certificate/0718-1002-6203-7170-8910

StinkiPinki

Yes, but if they can’t get a mortgage for it, then I could be looking for cash buyers? 

Petriix

It's entirely possible to properly insulate any property, and arguably something worth doing as early as possible in your ownership. It's fairly simple to add a layer of insulated plasterboard to the inside of solid external walls. Heating costs add up over the years.

AdrianC

StinkiPinki said:

Yes, but if they can’t get a mortgage for it, then I could be looking for cash buyers? 

There is no suggestion they won't be able to get a mortgage for it.

ProDave

I have been saying for a long time that houses with poor EPC should be wort less than those with a good EPC to reflect the higher running costs and the money that needs to be spent to improve them.

I think that is going to become reality soon.  The very fact the OP is having doubts suggests he would prefer the better house and does not want to be stuck footing the bill to upgrade the poor house.

Of course there us the counter argument that grants will be available to improve these older poorer homes so you might, just might, be able to upgrade it at little cost some time in the future.

Justonemorecupoftea

NatWest already seem to have (marginally) preferential rates for houses rated A&B. 

Have you looked at the work required to get it up to a C?

I would imagine the worst case scenario would be a difference in rates, rather than some houses not being mortgageable. You can't rent houses out with an EPC lower than E. I personally think they should increase this.

StinkiPinki

AdrianC said:

StinkiPinki said:

Yes, but if they can’t get a mortgage for it, then I could be looking for cash buyers? 

There is no suggestion they won't be able to get a mortgage for it.

Can I ask then why my solicitor is querying it with the lender? It has come out of the blue to me. 

StinkiPinki

Justonemorecupoftea said:

NatWest already seem to have (marginally) preferential rates for houses rated A&B. 

Have you looked at the work required to get it up to a C?

I would imagine the worst case scenario would be a difference in rates, rather than some houses not being mortgageable. You can't rent houses out with an EPC lower than E. I personally think they should increase this.

I did. According to the report, even with the plaster board, new condensing boiler, etc costing up to 10k of work, it would still only get to a ‘D’ . 

AdrianC

ProDave said:

I have been saying for a long time that houses with poor EPC should be wort less than those with a good EPC to reflect the higher running costs and the money that needs to be spent to improve them.

I think that is going to become reality soon.

It's reality as soon as buyers start offering less for them. It's that simple.

In practice, most buyers recognise that EPCs are pretty much useless. When we sold our old place, rented a place over winter, and bought this one, all three were within one point on the EPCs. Low 30s, F.

BUT...

Our old place was comfortable enough for a Victorian place. It had the odd draught, we'd removed the hideous ally secondary double-glazing hiding the lovely leaded-light Crittall windows in a couple of rooms.

The interim rental barn was bloody freezing. It had a mezzanine with a HUGE single-glazed window. It had a gale through the join between the two halves of the barn. On a cold day, the boiler was running FLAT OUT all day. We got through £250 of gas in February alone.

This place is much larger, yet has the lowest heating costs... despite being on bulk LPG, not mains gas. The long north wall has thick external insulation behind timber cladding. There's insulation below the underfloor heating all downstairs. It's cozy as anything. I think we put the heating on in the day maybe half a dozen times this winter, otherwise it's evening only. Is it passiv? God, no. Nowhere close. But is it a league ahead of the other two? Yup.