Britain’s net zero crusade is making it harder to sell your home

Alex MarshMon, May 11, 2026 at 2:00 PM UTC

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net zero making selling homes harder

Historic homes, with their thatched roofs and Victorian red bricks, are a defining feature of English villages, towns and cities. Yet owners and prospective buyers are coming under growing pressure as the drive towards net zero accelerates.

Some banks are steering their books towards efficient homes, while purchasers are weighing the long-term costs of properties with lower Energy Performance Certificate (EPC) scores.

As regulatory requirements tighten, the gap between older and newer housing stock has become more commercially significant.

NatWest, for instance, aims for half of its residential lending to be secured against homes with an EPC rating of ‘C’ or above by 2030. It has already made significant progress, increasing the share from 44pc to 49pc in just three years.

Government policy under net zero zealot Ed Miliband moves in the same direction. Minimum standards in the buy-to-let sector are tightening, with rental properties required to reach EPC ‘C’ by 2030, up from the current ‘E’ threshold.

The combined effect falls disproportionately on older housing stock. Homes built before 1929 have an average EPC score of 61– equivalent to a ‘D’ rating – compared with 84, or a ‘B’, for properties built since 2012, according to Ministry of Housing, Communities and Local Government data.

So how worried should these homeowners be?

The shift to green homes

In 2020, Boris Johnson’s government suggested introducing specific reporting requirements or EPC targets for mortgage providers.

This would have resulted in “league tables” ranking lenders by the average EPC band of their portfolio, as well as a potential mandatory target for all lenders to meet a portfolio average of EPC ‘C’ by 2030.

The plans were shelved after the Building Societies Association (BSA) warned it could create a “two-tier market”, in which properties in the lower EPC bands could become “stranded assets”.

But this has not stopped some lenders from pivoting towards the most energy-efficient housing stock.

Paul Broadhead, of the BSA, says: “There’s not necessarily a drive to lend only to ‘A’s, ‘B’s and ‘C’s, but lenders have started looking at green finance more generally.”

To incentivise homeowners to purchase more energy-efficient properties with EPC rating of ‘A’ or ‘B’, lenders have rolled out green mortgages, which offer a better rate, cashback or a lower product fee than a typical mortgage.

Lenders increasingly favour energy-efficient homes

In March 2022, green mortgages comprised 9pc of deals in the UK market, rising to 16pc by August 2023, data from Moneyfacts shows. Today, these deals make up 12pc of the market.

Meanwhile, some lenders, such as Lloyds and Halifax, have started using the EPC rating of a property when calculating mortgage loans. This means those buying a property with a low rating, such as ‘F’ or ‘G’, may eventually see a decrease in the available loan.

NatWest said last year that it managed “climate-related risks” in its residential mortgage portfolio with operational lending limits.

But as Chris Sykes, of mortgage broker MSP Financial Solutions, points out, there is no financial benefit to a lender in offering preferential rates to more energy-efficient properties. So why bother?

According to one industry source, banks are looking to lend on properties with better energy efficiency scores in order to reduce the indirect greenhouse gas emissions associated with their investment and lending activities.

This has in part been driven by rules introduced in April 2022, which require Britain’s largest banks and financial institutions to publicly report these so-called financed emissions. Many banks have also committed to hitting net zero by 2050, in line with the Government’s own target.

Sykes says: “Lenders are trying to encourage people to buy properties that are a better EPC so they can meet targets and say to the Government that they’re doing loads of great stuff. There’s definitely pressure and they’re definitely being encouraged.”

’A very deliberate reshaping of the market’

Transaction data from estate agents Hamptons shows that in 2016, it took exactly the same number of weeks on average for a property with an EPC rating of ‘C’ or above to sell as for those properties with an EPC rating below ‘C’.

But a small gap has now opened up; at present, it takes two weeks longer on average to sell a less efficient property.

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This is in part because buyers are increasingly aware of how much it costs to heat a home as a result of rising energy bills, according to Hamptons analyst David Fell.

“Buyers often look for a ‘C’ rating, which typically means the basics have all been done: the home is well-insulated, has a modern boiler and double glazing,” he says. “If homes don’t offer this, many buyers factor in the costs required to achieve it.”

Telegraph analysis shows that the value of detached homes with an EPC rating below ‘C’ has grown at a slower rate than that of more efficient properties over the last five years. Between 2020 and 2025, the price of a property rated ‘C’ or above grew by 19.2pc, compared to growth of 16.5pc for less efficient homes.

Earlier this year, The Telegraph also found that the price growth of homes heated by oil – which are typically older and more rural – is falling behind on-grid properties, suggesting buyers are being put off.

And analysis by The Mortgage Works, Nationwide’s buy-to-let lending arm, reveals that an EPC of ‘A’ or ‘B’ boosts a property’s value by 1.6pc compared to a ‘D’ rating for owner-occupied homes, and by 12.2pc for buy-to-lets. An ‘E’ rating lowers the price by 0.3pc for owner-occupied homes, and by 1.7pc for rentals.

This relative disadvantage in saleability and price is tough to overcome for owners of older properties, which are typically harder to upgrade than new builds.

Jonathan Thompson, a heritage adviser at the Country Land and Business Association (CLA), says: “Getting to EPC ‘E’ is usually relatively straightforward, although there are a few cases where that’s impossible.

“But ‘C’ is a completely different kettle of fish, and will be very difficult to reach for traditional buildings unless there are massive improvements in the underlying EPC measurement methodology.”

Data from the English Housing Survey 2024 shows that the average cost to improve the energy efficiency rating of a property built before 1919 to a ‘C’ is £10,728 – around five times more than the cost for a property built since 2013.

This problem is felt most acutely in the buy-to-let sector, where minimum energy efficiency standards mandated by the Government are already impacting landlords with portfolios of older, less efficient properties.

At present, a property must reach an EPC of ‘E’ to be rented out, with the standard set to be tightened by Miliband’s net zero ministry to an EPC of ‘C’ in 2030. Some exemptions will apply, including a £10,000 cost cap.

The National Trust, which rents out 2,500 properties, recently sold one of its homes in Dorset which failed to meet minimum energy efficiency standards. The charity is also considering whether to sell another empty property in the same village due to the high costs of upgrading it.

Experts also warn that a “two-tier” buy-to-let mortgage market is already developing ahead of tighter minimum energy efficiency standards coming into force.

Andrew Lloyd, of property analysts Search Acumen, says: “What’s happening now is a very deliberate reshaping of the market.

“On one hand, you’ve got lenders dangling green mortgages and small rate discounts to pull investors toward ‘A’ to ‘C’ rated properties. On the other hand, anything lower is being quietly squeezed out – higher costs, tighter criteria, fewer options. It’s created a clear two-tier system.”

NatWest says that it does not lend on buy-to-let properties rated below ‘E’. Nationwide says that it only lends on these less-efficient properties if they have an exemption from minimum energy efficiency standards, adding that landlords would also need to have a deposit of at least 25pc if the property has a ‘D’ or ‘E’ rating.

Mick Taylor, of Santander, says: “In the market, the typical approach is that, if an application comes in for a rental property where the EPC is below ‘E’, the default is that most lenders will decline the case. However, we don’t do that. Instead, we pause the application and seek to obtain a compliant EPC on that property.”

This raises the prospect that as 2030 draws nearer, lenders could start to refuse to lend on rental homes rated EPC ‘D’ or ‘E’ to align with the higher standard.

Chris Norris, of the National Residential Landlords Association, says: “It’s probably logical that mortgage rules will mirror what landlords are allowed to let. What I would hope is that the mortgage market recognises that there will be quite a lot of exemptions to the regulations.”

For owners of England’s less energy-efficient homes, experts say there is no immediate need to panic. But this could change if government policy changes, pushing mortgage deals for more efficient properties to pull further away.

Nick Mendes, of mortgage broker John Charcol, says: “Lenders would be a bit more cautious in terms of higher loan-to-value, or requiring more deposit if that was the case in the future. But I don’t think we’re at that stage as yet.”

A Department for Energy Security and Net Zero spokesman said: “Everyone has the right to a decent, safe and affordable home, and our £15bn Warm Homes Plan will help roll out upgrades to those who want them.

“Up to five million homes will benefit, including through government-backed, low and zero interest loans for homeowners to install solar panels, batteries and heat pumps – saving them hundreds on their energy bills.”

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Source: “AOL Money”