The Government funded report by The Lending Group has been looking at innovative ways to encourage the public to make energy efficiency improvements to their homes and at making these homes more attractive to buyers.

The report suggests that homebuyers could take out bigger mortgages on those properties that have a higher EPC rating. This is because buyers of efficient homes will have more disposable income because of the lower energy bills and therefore could afford the slightly higher mortgage payments.

Analysis from the Nationwide Building Society, Arup and other building groups have calculated the differences and suggests an extra £4,000 for A rated properties being compared to C-E rated properties and up to £11,500 extra compared to G rated properties. This would benefit the new build industry in particular as new builds tend to have higher EPC ratings than older building due to the stricter building regulations.

The report shows that most lenders look at the Office for National Statistics data on energy bills which is based on a small dataset of properties but does not reflect the efficiency of the property being bought. The new report examined data from 40,000 properties to fully understand how EPC ratings affect energy bills. This allowed them to see what could be afforded in additional mortgage payments for those that had lower energy bills.