Why is home decarbonisation in UK homes an urgent mission?

home decarbonisation epc

Even the most hardened global warming sceptics will be re-evaluating their stance this summer. The climate crisis is real and how it affects our daily lives is more tangible than ever. At the time of writing, Tuesday 4th July 2023 was the world’s hottest day since records began. The need for home decarbonisation has never been more urgent.

El Niño, a natural but occasional weather event, was partly to blame for record temperatures. Growing carbon emissions were also behind the inferno conditions and wildfires that are ravaging Europe. Ironically, we’re in a cycle of carbon emissions. This causes extreme heat and increasing the reliance on air conditioning increases carbon emissions.  

52.2°C in Sanbao north-central China and 40.8°C in central Rome appear to be problems that don’t belong to us in the UK.  However, our nation does have a very real climate crisis of its own. 

UK households are responsible for 40% of our country’s carbon emissions according to the Climate Change Committee. While transport and aviation choices are included in this figure, the carbon produced when we power our homes is astonishing. In fact, a report by JLL claims domestic heating alone currently creates around 14% of the carbon emitted in the UK. This explains why we’re being urged to install heat pumps and solar PV panels – and to do it urgently.

How urgent is urgent when it comes to home decarbonisation? 

The UK Government has set the ambitious target of becoming net-zero carbon by 2050. And it’s unfeasible to achieve this goal overnight. Therefore, the Government sets carbon budgets, which restrict the total amount of greenhouse gases the UK can emit over a five-year period. During the first carbon budget period (2008 to 2012), our greenhouse gas emissions were limited to 3,018 million tonnes of carbon dioxide equivalent (MtCO2e). 

The permitted emissions have reduced over time. This will continue to do so well into the future in order to hit the 2050 net-zero carbon goal. We’re currently in the fourth carbon budget period, which permits the UK to emit just 1,950 MtCO2e between 2023 to 2027. After that, it has been agreed that the fifth carbon budget period, covering 2028 to 2032, should be set at 1,725 MtCO2e.

Poor eco performers easily identified

Urgency to address the carbon emitted by domestic properties was identified in the 2000s, when the EPC was introduced in England and Wales. EPCs provided a quick way to target the most polluting housing stock, as the certificate shows how much CO2 a property emits and grades the property’s eco efficiency, with A the most energy efficient rating and G the worst.

Rental properties were the first to come under the carbon reduction remit and it became a legal requirement for a let property to have an EPC rating of at least an E in 2018. To achieve such a rating, landlords with F and G-rated rentals had to make eco changes to their buy-to-lets, such as ensuring the property had double glazing, converting to LED lighting, providing energy efficient appliances, and adding extra insulation to loft spaces and walls. 

What are the EPC requirements for 2023?

All buy-to-let properties must have at least an EPC rating of E to comply with the law. However, the Government seeks faster and more radical progress due to the climate crisis. This is likely to lead to tighter EPC requirements in the near future. By 2025, all new and renewing tenancies will require at least an EPC rating of C. This extends to all rented properties in 2028. There are discussions about raising the standard further to a B by 2030. This potentially makes it illegal to sell properties with very low EPC ratings.

Landlords now must improve to meet incoming standards. This includes drastic measures like heat pump adoption, rainwater harvesting, grey water recycling, solar panel installation, and electric vehicle charging points. Achieving an EPC rating of C is easier for new build homes. 93% of new homes in England and Wales delivered in Q2 2021 already achieving this rating or better (Inside Housing).  

The Government changed Building Regulations in June 2022 so new homes in England produced around 30% less carbon emissions compared to the old regulations. This was in preparation for The Future Homes Standard. These are a set of rules that will come into effect from 2025. The rules will ensure new homes built after 2025 produce 75-80% less carbon emissions.

For landlords of older properties – and it’s worth noting that Valuation Office Agency data shows 61% of homes in England and 62% of homes in Wales were built before 1983 – only a raft of eco changes will improve EPC ratings.

Rentals and the big retrofit for home decarbonisation

The prospect has led to a new buzz word – retrofitting. This is the act of going back into an existing property to fit energy saving measures. Retrofitting improves EPC ratings and has spawned a new ecosystem of assistance. Landlord financing, EPC loans, non debt-based landlord finance and retrofit finance are serious considerations given the cost of making energy saving improvements.

How much does retrofitting cost?

Only 4% of existing dwellings achieve A or B EPC ratings. It’s a concern for property investors and potential landlords with older investments. Knowing the approximate costs of popular eco improvements is essential. Installing solar panels costs around £5,000, while an air source heat pump can range from £7,000 to £13,000. Additionally, a standard 7kW home fast charger for electric vehicles can cost between £500 and £1,000, plus the charger itself.

Do you have a below C EPC rating?

If you own a rental property where the EPC is an E, now is the time to plan for home decarbonisation and energy efficiency improvements. Factored can help you secure the funds you need to make such changes. This is by selling your future rental income rights to us in return for upfront cash. This is not a loan, so no hard credit checks are necessary. And it’s an initiative open to landlords who are unable to obtain personal finance, credit or a further mortgage advance. Get in touch here to learn more about Factored EPC finance solutions.