The Hidden Cost of a Poor EPC Rating When Selling or Renting a Property

A poor Energy Performance Certificate (EPC) rating can have a bigger impact on a property than many owners realise. Beyond legal compliance, low EPC ratings can quietly reduce property value, limit tenant interest, and increase long-term costs when selling or renting.

Reduced Buyer and Tenant Demand

Properties with EPC ratings of F or G are often less attractive to buyers and tenants. High energy bills make these homes less appealing, leading to fewer enquiries and longer periods on the market.

Lower Sale Price and Rental Value

Buyers and tenants factor energy efficiency into their decisions. A poor EPC rating often results in:

• Lower offers from buyers

• Pressure to reduce asking prices

• Reduced rental income, as tenants prioritise affordable running costs

Longer Time on the Market

Energy-inefficient properties typically take longer to sell or let. Extended marketing periods can lead to repeated price reductions, increasing the overall cost of achieving a successful sale or tenancy.

Costly Negotiations and Last-Minute Upgrades

Low EPC ratings are frequently used as a negotiation tool. Buyers may demand discounts to cover future upgrade costs, while landlords may be forced to carry out improvements quickly to meet legal requirements before letting.

Legal and Compliance Risks for Landlords

Landlords cannot legally rent out properties rated F or G unless a valid exemption is registered. Non-compliance can lead to:

• Fines of up to £5,000 per property

• Inability to legally let the property

• Enforcement action by local authorities

Higher Mortgage and Finance Barriers

Some lenders consider EPC ratings when approving mortgages. Poor ratings can limit buyer affordability or access to favourable mortgage products, further reducing demand for inefficient properties.

Missed Opportunity for Long-Term Value

As regulations tighten and energy efficiency becomes a priority, properties with poor EPC ratings risk losing value over time. Homes with higher ratings are more resilient in the market and better positioned for future regulatory changes.

Conclusion

The hidden cost of a poor EPC rating goes beyond energy bills. It can reduce demand, lower property value, delay sales or lettings, and expose landlords to legal risks. Improving a property’s EPC rating before selling or renting is not just a compliance exercise it is a strategic investment in the property’s marketability and long-term value.