The £100 Million EPC Scandal -- Homeowners Face Another £100 Million Bill in 2009, Says HomesMatter

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Since the introduction of home information packs (HIPs) in the UK, struggling home sellers have been forced by Government to pay out around £100 million for energy performance certificates (EPCs), without receiving any help or advice on what to do with them. Landlords are now also required to purchase EPCs so there is a growing risk that a further £100 million or more could be 'wasted' in 2009, unless government and industry come up with solutions.

HomesMatter (http://www.homesmatter.co.uk) a 'green' estate agent, claims that since the introduction of home information packs (HIPs), struggling sellers have been forced to pay out around £100 million for energy performance certificates (EPCs), without receiving advice on what to do with them. Landlords are now also required to purchase EPCs so there is a growing risk that a further £100 million or more could be 'wasted' in 2009, unless government and industry work together to provide solutions.

Nigel Farren of HomesMatter says "The EPC is the most important tool for facilitating improvement in the energy efficiency of existing homes, reducing energy bills and carbon emissions. To date, over one million EPCs have been purchased by sellers but most have not been acted upon because sellers have not been given any advice by their estate agent or any financial incentives to install recommended energy savings measures, such as loft and cavity wall insulation. Buyers get the benefit of installed measures, so sellers need something 'special', if they are to act on EPCs."

He adds: "There has been a collective failure by government and industry to help sellers. Government has not offered them any incentives despite the European Commission's Energy Performance in Buildings Directive saying that member states, should do so. Energy Savings Trust's 'Green Homes' service is focused on homeowners who are not moving and, to date, local authorities have prioritised improving the energy efficiency of social housing although private homes are responsible for most carbon emissions.

Estate agents are mainly responsible for selling EPCs and have breached their own code of practice by failing to advise clients on how they could improve the value / saleability of their homes by implementing energy savings measures. HIP providers rely on estate agents for income and instead of marketing to sellers direct, they have also relied on estate agents to promote energy efficiency, failing to recognise that agents don't 'see anything in it for them' and are not interested in EPCs because they are part of HIPs, which most agents want abolished."

Farren continues: "Legislation is also inadequate. There are no statistics available on how many homeowners have acted on EPCs. There is no legal obligation on estate agents to explain EPCs to clients, let alone recommend action. All they have to do is include the EPC bar chart in property particulars, which is useless without explanation. Homes are valued by an agent before an EPC is issued which precludes consideration being given to the energy rating or what measures could be implemented to increase value. And, domestic energy assessors who issue EPCs, can't give advice or recommendations to sellers as they are required to stay impartial. As a result, through no fault of their own, sellers wrongly regard EPCs as an additional, unwanted, moving cost - and another stealth tax by government."

Farren concludes:" Doing nothing is not an option. Estate agents could face accusations of mis-selling from sellers who now outnumber buyers 15:1. As homes increasingly take longer to sell and tenants demand lower energy bills, an urgent rethink is required on how to get sellers and landlords to act on EPCs. We want to work with government and industry to solve this growing problem and await their response to a proposal we have submitted which would benefit both homeowners and the environment."

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Nigel Farren
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