A study of 200,000 conducted by Kamma found that by investing less than 5% of a home’s asset value, 84% of properties could reach this standard of efficiency.
It said half of the homes within the 84% share could improve the EPC rating by spending less than £5,000, while 18% of properties could be retrofitted for less than £750.
The firm said this dispelled the idea that improving the energy efficiency of a home was costly, suggesting that this was sometimes down to inaccurate data.
Kamma said estimates based on such data put homeowners off from doing works to their homes and slowed down the pace of property decarbonisation.
The firm said its findings were timely, as the Labour Party, Liberal Democrats and Green Party all announced plans to reintroduce minimum energy efficiency standards (MEES) legislation in their 2024 election manifestos, after Rishi Sunak scrapped plans last year.
Orla Shields, CEO of Kamma, said: “Out-of-date retrofit cost estimates are holding back progress across the whole property industry. Most lenders and homeowners rely on retrofit recommendations, installation cost estimates, and energy bill saving estimates from the property’s EPC certificate, but EPCs use cost baselines that are over a decade out of date.
“Better data on property carbon emissions overcomes the perceived cost barrier, increases action and unlocks the benefits of retrofit for homeowners and lenders alike.”
‘Not just homeowners that stand to benefit’
Kamma said efficient homes were a benefit to lenders too, as an increase in a property’s value after being retrofitted improved the loan to value (LTV), reduced risk and could lower a lender’s capital provisions.
Shields added: “It’s not just homeowners that stand to benefit from retrofitting. Insulating homes reduces bills and insulates lenders from the increased risks associated with lending on under-performing homes. Changing regulations and changing buyer preferences both provide good reasons to act.
“With better data, better choices can be made.”
Kamma works with lenders to help borrowers make their homes more sustainable by suggesting measures to improve the property’s efficiency. The firm has worked with the likes of Atom Bank, Octopus Real Estate and Kensington Mortgages.
Related: EPCs found littered with errors, prompting calls for reform
