B4NZ response to the ‘Reforms to the Energy Performance of Buildings regime’ consultation 2024-2025
B4NZ welcomes the opportunity to respond to the Reforms to the Energy Performance of Buildings (EPC) regime consultation.
B4NZ brings together banks, businesses, policymakers and regulators to define and implement the interventions needed to accelerate the UK economy’s transition to net zero.
B4NZ convenes the Finance Working Group for the National Retrofit Hub. Over the past year, we have made significant progress, including co-hosting workshops with the finance industry that informed the NRH’s recently launched report “The Future of Energy Performance Certificates: A Roadmap for Change”. This report, with contributions from B4NZ, outlines an eight-stage roadmap for reforming Energy Performance Certificates (EPCs), addressing the limitations of the current framework that hinder retrofitting decisions.
We shall be primarily responding in our role as an organisation which represents a large sum of the banking industry in the UK, as well as other corporate members and partners. As a key stakeholder in the built environment and energy efficiency sector, we recognise the critical role EPCs play in driving sustainability, informing investment decisions, and supporting the transition to net-zero.
Our response focuses on ensuring that EPC reforms enhance data accuracy, improve accessibility, and balance regulatory ambition with practical implementation. Our response to the EPC reform consultation is as follows:
1. To what extent do you agree or disagree that information using an energy cost metric should be displayed on EPCs? Please select one option for each building type.
Strongly agree
Including an energy cost metric on EPCs is crucial, as it provides homeowners, buyers, and lenders with a tangible understanding of ongoing expenses associated with a property. Energy cost transparency can also drive investment in energy-efficient measures by illustrating potential long-term savings.
However, for this metric to be meaningful, it must be based on real energy consumption data rather than estimates. Research from UK Finance’s Net Zero Homes report suggests that cost related metrics can be misleading if based solely on projected rather than actual usage patterns. Additionally, given the volatility of energy prices, this metric should incorporate mechanisms to reflect updated energy price trends to avoid misrepresenting actual costs.
2. To what extent do you agree or disagree that information derived from a fabric performance metric should be displayed on EPCs? Please select one option for each building type
Agree
We agree with the consideration of fabric and the inclusion of this metric in an EPC certificate.
There are a range of benefits to the users of an EPC, including the ability to better support property owners and buyers on their next steps for improving the energy efficiency and reducing the carbon of properties in the UK. If this information were readily available and accessible via API, it would better support the industry in identifying properties more suitable for heat pump adoption (due to their better fabric performance) allowing them to support the technology rollout more effectively.
4. To what extent do you agree or disagree that information based on a heating system metric should be displayed on EPCs ? Please select one option for each building type
Disagree
A carbon metric would provide a much clearer link to intended outcomes than a heating system ranking. A carbon metric is easier to understand, and recommendations associated with it could easily include switching to low-carbon heat.
Providing a ranking of different heating systems would introduce multiple risks: a barrier could be created to innovation as new heating system solutions would need to navigate entry into the list, this metric could also encourage the cheapest solution to be taken to move up a rating, which might not lead to the best consumer outcomes, for example if direct electric heating held a higher rating than gas boilers. It would also be difficult for this metric to reflect regional considerations and incorporate communal or district heating – as different specific systems would have different carbon intensities – each would need to be evaluated in their own right.
Our recommendation is for the carbon metric to be a headline metric, that this is used to set Net Zero targets, and to incentivise the transition to low-carbon heat.
6. To what extent do you agree or disagree that information based on a smart readiness metric should be displayed on EPCs? Please select one option for each building type
Strongly agree
Smart readiness can identify properties that support flexible energy systems (e.g., smart meters, EV charging). Banks might use this data to promote financing for future-ready buildings.
Research by Paragon Bank highlights that green finance products increasingly prioritise smart enabled homes due to their long-term energy savings potential.
Understanding energy use at a granular level supports banks in identifying properties that are aligned with energy efficiency goals. While the emphasis on the presentation of information is valuable, it is crucial that this is underpinned by measured, real-world data. Ensuring transparency in differentiating between estimated performance and actual energy usage is essential to building trust and supporting informed decision-making.
A smart meter readiness metric would require the development of a robust framework, along with significant communication and education efforts to ensure consumer preparedness
7. What are your views on the definition, design principles and the scope for a smart readiness metric?
Although we strongly agree that a ‘smart readiness’ metric should be incorporated into EPCs, this may not need to be a headline metric. As an additional metric it could still be used to 3 incentivise action, without overwhelming householders. More focus could be placed on this metric in regions where grid capacity is most limited, or the cost of grid upgrades are highest (such as in rural areas).
Energy Systems Catapult are conducting research into a ‘Smart Building Rating’ which could be used as the basis for this metric. A smart meter readiness metric would require the development of a robust framework, along with significant communication and education efforts to ensure consumer preparedness.
The embodied carbon and ecological impacts of the technology and materials associated with making a home ‘smart ready’ should be considered in the design of this metric. Neighbourhood and shared energy systems should also be considered within the rating methodology.
This metric would also be useful for the finance sector, supporting banks to promote financing for future-ready buildings and identify properties that are aligned with energy efficiency goals.
8. To what extent do you agree or disagree that information from an energy use metric should be displayed on EPCs? Please select one option for each building type.
Strongly Agree.
Energy use metrics are critical for assessing a property’s efficiency and informing financing decisions. Displaying real, verifiable energy consumption data on EPCs — rather than estimates — would provide a trusted basis for stakeholders, including banks, to make informed decisions.
The ability to track trends over time would further support efficiency improvements and drive investment in sustainable housing, particularly through products like green mortgages. Verifiable data builds confidence and ensures accurate decisions on energy-efficient upgrades.
We would recommend that a building’s energy use (kWh/yr), energy use intensity (kWh/m2/yr) and peak demand were provided within an advanced view in the EPC. A metric showing a building’s energy use would be valuable to built environment professionals, and to provide alignment with the Net Zero Building Standard. This metric would provide the background information to calculate the cost and carbon metrics. This information is less useful to, and not generally understood by householders, so may not need to be included within the householder view on an EPC. 80% of the 300 industry professionals we surveyed supported the inclusion of data on peak energy demand, believing it would contribute to energy grid management
9. If an energy use metric is to be displayed on Energy Performance Certificates (EPCs), which type of energy use measurement should be used to calculate this metric? Please select one option for each building type.
Delivered energy
Delivered energy refers to the actual energy consumed by a building, reflecting real-world usage patterns. This is the most relevant measure for assessing a building’s energy efficiency and provides the clearest insight into its actual environmental impact. In contrast, primary energy includes upstream energy losses during production and distribution, which, while useful for certain purposes, may not directly reflect a building’s immediate performance or the actual energy savings from retrofits or efficient technologies.
Santander’s Green Homes report highlights that properties with clear energy consumption data attract lower mortgage risk premiums.
Focusing on delivered energy enables more accurate energy performance assessments, facilitates clearer comparisons across buildings, and supports more targeted financial products, such as green mortgages or retrofit loans, which rely on real, measurable improvements in energy use.
Alignment with the metrics within the Net Zero Carbon Building standard should be ensured.
10. To what extent do you agree or disagree that information from a carbon based metric should be displayed on EPCs? Please select one option for each building type.
Strongly Agree
Aligning lending portfolios with net-zero targets requires accurate carbon data on buildings.
UKSIF’s Financing the Future report stresses that inconsistent carbon coefficient values create discrepancies in EPC ratings, leading to challenges in green finance implementation.
A carbon metric, with easy-to-understand rating system, should be introduced as a headline metric. We agree with the recommendation from NESTA that cost and carbon should be the two headline metrics on EPCs, and our industry engagement suggests that these should sit alongside secondary metrics on health, climate resilience and smart readiness, and ‘advanced’ metrics such as energy use intensity.
The carbon metric should be used to set and measure progress against Net Zero targets, and incentivise the switch to low-carbon heating and hot water. This metric should be aligned with the Net Zero Carbon Building Standard, and intuitive ratings could be used, such as: Net Zero, Nearly Net Zero, Moderate Emissions and High Emissions, presented alongside an average annual CO2 footprint.
Interactivity within the EPC would allow householders to learn more about their home’s carbon emissions – householders should be able to click on the metric to receive further information on their heating system type and lower carbon alternatives.
In the finance sector aligning lending portfolios with net-zero targets requires accurate carbon data on buildings. This is crucial for green loans and ESG reporting. A consistent and transparent methodology calculation of emissions based on energy use is required to ensure this metric is useful.
11. To what extent do you agree or disagree with incorporating smart metering technologies, like SMETERS, into the energy performance assessment framework for buildings? Please select one option for each building type.
Strongly Agree
These technologies can provide real-time, accurate data on energy consumption, which is crucial for assessing a building’s true energy performance and identifying areas for improvement. There is a well-evidenced performance gap between predicted / modelled and real-world energy use data for building, and incorporating the latter would therefore make the information with EPC much more useful. OakNorth Bank’s TCFD report highlights that real-time 5 energy consumption data significantly improves lending risk assessment. Integrating smart meters can enhance the reliability and granularity of energy data, making it more actionable for stakeholders including property owners, banks, and policymakers. The introduction of SMETER data needs to be balanced with keeping EPCs affordable and accessible, one method to do this would be to introduce EPCs with different ‘confidence ratings’ or ‘levels.’ High confidence rating EPCs, including real-world data, might have a higher cost, however, banks and building societies could require these to provide access to low-cost green finance, they could be a requirement of government grants, or they could be used to unlock guarantees of performance. Confidence ratings could be aligned with the PCAF Financed Emissions Standard data quality scores for mortgages, to provide banks with more reporting accuracy and certainty. EPCs currently have a PCAF data quality score of 3.
12. Do you have any views on key transition issues?
It is essential that clear guidance is provided for property owners with older EPCs to ensure they are not unfairly disadvantaged by regulatory changes while also incentivising improvements in energy performance.
Any individuals or organisations that have undertaken energy efficiency improvements in compliance with previous regulations should not be penalised due to evolving benchmarks. To maintain fairness and regulatory certainty, there should be a carry-over mechanism for compliance with MEES regulations, as well as exemptions where verifiable evidence demonstrates that work has been carried out in line with previously established policy requirements.
We strongly support the introduction of an equivalence metric, which would provide a transitional framework for comparison between the existing and updated EPC methodologies. This would allow for greater clarity and market confidence, particularly within the Private Rented Sector (PRS), by clearly indicating whether a property currently complies—or what additional steps are required to comply—with both current and future MEES standards.
Now is the right time to implement these changes, as scaling up retrofit activity in the UK is a national priority. Ensuring a well-managed transition will be key to driving investment and enabling a smoother shift toward higher energy performance standards without creating unintended financial or regulatory burdens for property owners and stakeholders.
13. What should be the validity period for Energy Performance Certificate (EPC) ratings?
5 years
14. To what extent do you agree or disagree with the approach for any changes to validity periods to only apply to new EPCs?
Disagree
Introducing a two-year transition period where existing validity periods are retained would provide a good balance between speeding up the improvements in accuracy and reliability of EPCs, while reducing disruption.
The validity period for Energy Performance Certificate (EPC) ratings should strike a balance between providing up-to-date, accurate information and ensuring that the process remains efficient and cost-effective. Therefore, we have selected 5-years, however, rather than simply 6 reducing an EPC’s validity period a better approach would be to introduce more ‘trigger points’ when EPCs need to be updated, for example when certain building works are carried out. These works often require certification or building regulations approval, which could be linked to a requirement for a new EPC. There is a risk that more ‘trigger points’ for when an updated EPC is needed could disincentivise home upgrade work – if this makes the process more onerous. However, allowing dynamic update of an existing EPC (rather than re-doing the whole calculation) could significantly reduce the time required to update the EPC, streamlining the process. This links to the government’s proposals, covered by questions 31 and 32, on using existing EPC data.
15. To what extent do you agree or disagree that a new EPC should be required when an existing one expires for private rented buildings?
Strongly agree
Regular updates to EPCs ensure that the energy performance of properties is accurately reflected, particularly in the context of potential changes to the building’s energy efficiency due to improvements or natural wear and tear. This would support better-informed decision-making for both landlords and tenants and help ensure that private rented buildings meet the necessary energy performance standards. However, the process should remain straightforward and costeffective to avoid creating unnecessary burdens on landlords and tenants, especially for those in lower-income areas. Additionally, this impacts the frequency of updated data available for rented properties, helping banks ensure accurate risk assessments for buy-to-let loans or portfolio exposure to non-compliant buildings.
16. To what extent do you agree or disagree that the regulations should be amended so that a property must have a valid EPC before it is marketed for sale or rent?
Strongly agree
Requiring a valid EPC before marketing ensures that prospective buyers, tenants, and lenders have upfront access to clear, reliable energy performance data. This transparency supports informed decision-making and incentivises property owners to improve energy efficiency, aligning with sustainability and net-zero goals.
To minimise financial burdens, innovative models could be explored, such as tying energy efficiency improvements to the property or its mortgage rather than treating it as a direct cost for the homeowner. This approach could involve integrating energy efficiency upgrades into mortgage financing or linking them to green financial products, which would spread costs over time while driving investment in sustainable housing.
It is also critical to ensure the process remains cost-effective and accessible, particularly for smaller property owners or those with limited resources, so that these regulations do not create unnecessary barriers to compliance or market participation.
17. To what extent do you agree or disagree that houses in multiple occupation (HMOs) which don’t already fall under the (Minimum Energy Efficiency Standards) MEES should do so when a room is rented out?
Strongly agree
According to research by Future Climate HMOs are more often in poor condition than other types of housing in the same area. HMOs are often old, solid wall properties with low levels of insulation with some having expensive to run electric heating systems.
Requiring an EPC will provide transparency and choice for bill paying tenants. But more importantly will allow government to extend Minimum Energy Efficiency Standards to the HMO sector. This will bring standards up across the sector and protect tenants who don’t have the purchasing power to rent alternative properties.
For landlords who pay the bills, requiring an EPC provides them with actionable advice on improvements to the property that could bring the bills down. Energy bills are a concern for landlords who pay them, with a landlord in our research trilling the use of smart, remotely controlled thermostats to control the heating in his HMO and keep costs down.
18. To what extent do you agree or disagree that there should be a transitional period of 24 months to allow HMO landlords to obtain a valid EPC and comply with MEES regulations?
Disagree
According to Local Authority Housing Statistics there are over 450,000 HMOs in England but as data is limited it is hard to say what the EPCs of these properties might be. Current MEES regulations state that properties can only be rented out if they meet a minimum of EPC E or are otherwise exempt. This may rise in the future, but is currently a very achievable target with most homes already falling inside the window of compliance. For reference, according to English Housing Survey data 97% of homes are an EPC E or above. We therefore suggest that landlords should be able to make the required changes within 12 months. Additionally, it is unclear if the 24 month timeframe is expected to commence from the point in which the new EPC reform has been rolled out or the point from which the regulations are announced. We suggest that the transitional point should commence from the moment that the “newly reformed” EPC metric is available to incentivise uptake of the more insightful EPC.
21. To what extent do you agree or disagree that we should remove the exemption for landlords from obtaining an EPC for buildings officially protected as part of a designated environment or because of their architectural or historical merit?
Agree
This change would have the positive impact of allowing tenants to understand the predicted energy consumption of a building, take informed decisions and plan accordingly.
28. EPC and DEC data To what extent do you agree or disagree with the approach to remove the option to opt-out EPCs from the EPB Register public address search?
Strongly agree
We agree that all EPC data should be openly available to access via both the public address search and or Open data. This ensures interested parties (researchers, lenders and industry) have access to all relevant data fields to better support the decarbonisation of the residential properties in the UK. A comparison can be made to the accessibility of MOT data in the UK which is available across all registered vehicles in the UK.
29. To what extent do you agree or disagree with retaining the option to opt out EPC address level content from the Open Data?
Strongly disagree
All EPC data should be openly available to access via both the public address search and or Open data. This ensures interested parties (researchers, lenders and industry) have access to all relevant data fields to better support the decarbonisation of the residential properties in the UK. A comparison can be made to the accessibility of MOT data in the UK which is available across all registered vehicles in the UK.
30. There is a proposal to remove the general prohibition on sharing data gathered under the EPB Regulations and replace it with a Secretary of State discretion about when, how and with whom to share the data. To what extent do you agree or disagree with the proposal
Strongly agree
We believe that more data within the EPC should be made available. Throughout the calculation process of delivering an EPC there is a wealth of information which would provide benefit to users of the data such as researchers, lenders and industry. This would support the scaling up and financing of energy efficient and green measures and subsequentially reduce the transition risk.
31. To what extent do you agree or disagree that data gathered in previous EPC assessments should be available for use in future EPC calculations for a dwelling?
Strongly agree
We agree that leveraging data from previous EPC assessments would be valuable, particularly for validating unchanged areas and improving the efficiency of conducting new assessments. This approach could reduce both the cost and operational burden of obtaining an updated EPC.
However, it is crucial that the use of historical data does not compromise the accuracy or reliability of newly issued EPCs. To maintain data integrity, appropriate training and quality assurance measures should be in place to help assessors determine whether older EPC data remains valid and representative of the property’s current state.
Additionally, certain building components—such as insulation, heating systems, and lighting— can degrade over time if not properly maintained. Any framework for incorporating previous EPC data should account for both natural and unnatural degradation, ensuring that outdated information does not lead to misleading assessments.
32. What are your views on the approach to using existing data, while balancing accuracy and practicality?
The use of existing validated data would enable the more regular and dynamic update of EPCs, as and when changes are made to a building.
There are risks associated with the use of existing data, if it is poor quality or not validated, two methods to overcome this risk would be to only allow data from existing EPCs to be used once reforms to improve their quality have come into effect, and to link EPCs with Digital Building Logbooks, to make the process more accurate and transparent .
A Digital Building Logbook is a secure online tool, that brings together information on a building. Data is integrated, added and updated through a variety of sources. Combining a DBL with and EPC could help validate build-ups and systems used to measure a building’s performance.
33. Managing EPC quality To what extent do you agree or disagree that Accreditation Schemes should be given more responsibility for overseeing the training of energy assessors?
Strongly agree
The need for quality trained EPC assessors is critical to ensure that there is trust and assurance around the quality of the EPC assessment and its subsequent outputs.
34. Do you have suggestions for other actions which could be taken to improve the accuracy and quality of energy assessments, or to help identify fraud in EPC assessments?
Additional requirements could be put in place for validated build-ups, test data an in-use data to be included in an EPC assessment. This could be linked to a higher ‘level’ or ‘confidence rating’ EPC. Integrating EPCs with Digital Building Logbooks would also provide the opportunity to transparently and clearly log and validate information on a building, that is checked and updated over time. Increasing the transparency and access to assumptions made in EPC assessments would allow professionals and homeowners to better review an EPC, and spot issues or inaccuracies.
35. To what extent do you agree or disagree with these proposals to improve compliance?
Neither agree nor disagree
The consultation does not set out a clear and detailed proposal for improving EPC and MEES compliance, however, the suggested engagement with LWMAs, estates and letting agents, and the improved access to data are welcome.
In the Private Rental Sector enforcement of MEES regulations will be a significant factor determining the success of retrofit of rented homes. The introduction of a ‘Private Rented Sector Database’, as put forward as part of the Renters’ Rights Bill would have multiple benefits to compliance: informing landlords of their duties, and allowing enforcement bodies to more easily identify non-compliant properties. This database should be coordinated with the EPB database.
Responsibilities on enforcement of EPCs should be made clearer to the industry and the public, and adequate resourcing to those responsible for enforcement should be provided.
36. Improved EPC compliance and enforcement. To what extent do you agree or disagree that penalties should be increased?
Neither agree nor disagree.
Although we understand that increasing the fines may have a subsequent impact on increasing compliance the enforcement has been insufficient and thus changing the fines should not be considered as the primary change and the focus should be on increasing enforcement.
46. Additional questions Please let us know if you have any evidence on the rate of voluntary implementation of recommendations made in EPCs.
When analysing properties in the EPC database in the PRS which have had at least two distinct EPCs performed. The trend shows that on average there was an improvement in average EPC SAP score. When comparing the most recent to the second most recent EPC there with in the PRS there was an improvement in average SPA score from 60 to 65 equivalent of an improvement in the A-C ratio from 32% to 42% in the subsequent EPCs. This figure reflects the effort made to improve properties in the private rented sector.
47. Additional questions Please let us know if you have any comments on the regulatory or equalities impact assessments presented alongside this consultation, in particular, are there any impacts on groups with protected characteristic
The policy consultation aims to bring about behavioural inertia and increased relevance of both EPC ratings and the recommendations within them. We believe that the consultation and costs borne within them have a significant and unjustified focus on the PRS and does not sufficiently consider the best goal of increasing EPC data coverage across ALL properties in the UK. By targeting the PRS you risk widening the gap of energy efficiency and the corresponding data between the PRS and the OO and SRS. This risks leaving behind 80% of the stock which also need to be upgrade by 2050.
One key statistic to consider is that the Private Rented Sector (PRS) now outperforms the owneroccupied sector in energy performance, with 42.9% of PRS stock rated between A and C, compared to 36.5% in owner-occupied homes. Lenders have been encouraging landlords to purchase more energy-efficient homes through preferential pricing, and the sector has made significant strides over the past decade. While it is crucial to maintain this positive momentum through clear and consistent signposting of future regulations and policies, targeting these policies solely at the PRS risks leaving other sectors behind. The progress seen in the PRS highlights the need for more initiatives and drivers in the owner-occupied and social rented sectors to catalyse similar advancements.
Contact:
Elena Pérez Celis
Head of Policy & Public Affairs
elena.perezcelis@b4nz.co.uk
