The impact of the EPC score on the value of your home.

A favorable EPC label has beneficial consequences for your monthly budget and the environment. But also on the sale value of your house! To understand more about this impact we talked to Sven Damen of Leuven Catholic University.

What is the EPC?

Whenever you rent or sell a home you receive an Energie Performance Certificate, based on the energy efficiency of your home. The EPC score is valid for 10 years. You can however improve it in the meantime by investing in energy-saving measures. Guidelines on the certificate tell you straight away what investments are needed to boost your score.

Read our comprehensive dossier to find out all about the EPC.

What does the EPC score mean for the value of your home?

After energy renovations you will very quickly feel the difference in your energy bills, but it is also quite likely that the value of your house will increase. On behalf of Leuven Catholic University, Sven Damen has investigated the effect of the EPC score on house prices in Flanders. We talked with him about the tangible effects of energy characteristics on the value of your home.

It is not surprising that the two are closely related. Buyers want a house that does not require any work, and with which they can be sure that they won’t eventually have any nasty surprises and will be less exposed to rising fuel prices

Energy characteristics as a key factor for the sale price

According to Damen’s study, homes with the best labels (A+, A and B) sell for almost 11% more than similar homes with an average label (E). The sale price increased by 2.3% per 100 points on average. In addition, homes with an A+, A or B label are sold almost a month faster than homes with a worse score.

A comparison carried out by Damen found that energy characteristics are the third most important factor in determining the sale price of a home, after size and location: “We took a number of variables into account in our analysis. Location is an important factor, but we see a clear evolution in the effect of energy characteristics on the sale price.”

Flats and the rental market

When it comes to flats, the effect of energy renovations on the sale price and thetime until sale is somewhat less marked than in the case of houses. Damen thinks that there are a number of reasons for this. For example, residents of flats consume on average 20% less energy, and so having renovation work done in a flat is often less self-evident. So if you are having renovation work done in a flat, it is mainly with a view to cutting your own consumption.

Do you plan to rent out your flat? If so, insulating renovation becomes even more interesting. According to this study by the housing policy research centre Steunpunt Wonen, energy characteristics such as roof insulation and double glazing may have a greater effect on the rental value of your apartment than on its sale price. But you should consult a specialist about the estimated effect of your investments.

Are green renovations less risky?

According to Damen, various surveys carried out with contractors and brokers in the US show that investments in renovations are often not reflected in a corresponding rise in the value of the entire home. Damen’s study suggests that green renovations are less risky. This view needs to be qualified. “We did not have any information about the cost of specific renovations. In addition, when you fit a new kitchen it is very likely that you will also make some alterations to your energy system, which makes it difficult to separate out one type of investment from another.”

The investments which have the greatest effect on increasing the value of a home

“We looked closely at various individual energy characteristics to ascertain their effect on the EPC label and the sale price of a home. For example, the sale price of a home with roof insulation is on average 5% higher than that of similar homes without roof insulation. Also, homes with single glazing are worth 8% less than similar homes with double glazing.”

Cavity wall insulation has a -10% effect on your EPC, but the effect on the sale price is less pronounced. It is still an important insulating measure which has a considerable effect on the energy efficiency of your home. What could be the reason for this? Potential purchasers are less likely to notice cavity wall insulation than, for example, insulated windows.”

So when you sell your home you should also draw attention to the non-visible energy renovations that you have carried out, so that they can be reflected in the price you eventually get for it. 

House price evolution

It is hard to predict the evolution of house prices. Damen thinks that various scenarios are possible. “It is possible that tighter legal requirements that force purchasers to invest in homes with a good label might dampen the price of the investment cost required. On the other hand, purchasers might have more money to spend on a house if their energy bills fall.”

Irrespective of how house prices evolve, in the short term a positive EPC label will affect the price of your house in a positive way. In the longer term, your energy renovations will in any event have an impact on your consumption costs and the environment. That alone provides a great incentive to invest now in these insulation measures. 

> Find out now what energy investments you can make to improve your EPC label.

> What about paying for energy and insulation renovations?