At Octopus Real Estate, we see the opportunity in energy efficiency improvement. Real estate is one of the major, global emitters. It’s also amongst the slowest industries to decarbonise. Here in the UK, the government has made a commitment to going Net Zero by 2050. Last year, tabled regulations requiring all landlords to upgrade their properties to meet energy performance certificates (EPC) raised the profile of the issue across the industry; while the regulations were sidelined, it’s likely that something similar is around the corner.
The spectre of regulation adds urgency to the question of energy efficiency optimisation, but we believe that upgrading rental properties to meet higher EPC targets makes sound, commercial sense. Over the long term, energy efficiency improvements stand to reduce maintenance costs, increase the value of the asset and meet mounting tenant demand for greener homes. We’ve designed our green lending products especially for landlords seeking to take advantage of the opportunities in energy efficiency improvement – but we understand the doubts.
The biggest argument against investment in EPC improvements is simple. ‘It’s too expensive.’ It’s true that many of the headline-grabbing routes to an improved EPC rating come with a hefty price tag, but these doesn’t tell the whole story.
To demonstrate the true costs of energy efficiency improvements – and show that a modest investment can go a long way – we’ve partnered with Kamma, the UK’s leading property data and analytics company. Their Retrofit Explorer offers landlords actionable insights into improving the energy efficiency, debunking the idea that improvements come at prohibitive cost and providing a clear pathway to greener rental homes.
What is the Kamma Retrofit Explorer?
Kamma is a pioneering data and technology enterprise, on a mission to bring property in line with other industries in the journey to Net Zero. They recognised that the UK’s property data is, quite simply, not good enough. Old and out-of-date, or even just wrong, inaccurate data paints a distorted picture of the true cost of efficiency solutions, disincentivising homeowners and landlords from taking steps to upgrade their property.
Today, a few barriers stand in the way of landlords and energy improvement. We’ve mentioned the cost, but landlords are also challenged by the perception that these sorts of improvements are low priority and question of even knowing where to start.
To counter this, Kamma has created the UK’s most advanced profile for every property in the country. Retrofit Explorer leverages the company’s industry-leading dataset to dismantle these barriers. Drawing on the UK’s EPC databases and, where necessary, using cutting-edge modelling to make an estimate based on the property’s characteristics, the award-winning tool is optimised for cost efficiency and accuracy.
The benefits
With a simple interface, the Retrofit Explorer allows landlords to identify their properties, confirm its main characteristics and amend it with any upgrades that have been undertaken to date. The Explorer cycles through 200,000 combinations of energy efficiency measures, offering insights based on either the landlord’s target EPC improvement or budget.
In addition to providing a list of recommended improvements, the tool also demonstrates the return on investment offered by implementing them. Raising a property’s EPC rating from a D to a C, for example, stands to increase the valuation of the property by 4.8%. The Explorer also outlines the reduction in operational costs, as well as the carbon impact of improvements.
The tool connects landlords to Trustmark certified installers, offering not only a starting point – but also a means of carrying through. To date, the cost of energy efficiency improvements has been misrepresented. While it may seem low-priority, given the legislative reversal on regulation last year, it’s highly likely that rental properties EPC ratings will find themselves on the governmental agenda again soon. Happily, it doesn’t have to be difficult or expensive – and making a start has never been easier.
Property will have to decarbonise if Net Zero by 2050 is going to become a reality, but it doesn’t have to come at a cost. In fact, as the Retrofit Explorer demonstrates, landlords with the vision to invest in their property’s energy efficiency can look forward to healthy rewards. You can try the Retrofit Explorer, or head to our website to learn more about how our Green Lending products are helping landlords unlock the benefits of the path to Net Zero.
