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Price Cap Rise Underscores Importance of Rental Market Energy Efficiency

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    Energy Price Cap Set to Rise by 10% in October

    It has recently been announced by Ofgem that there will be an increase to the energy price cap of 10%, set to come into effect for the period between 1st October to 31st December 2024.

    According to Rightmove, this will increase the average annual household energy bill by £149 compared to the previous three months.

    However, this is just what the typical household will pay. Rightmove states that there will be large variations in price rises across households due to a range of factors. One of these factors is how energy-efficient the property is.

    EPC ratings continue to become a more important consideration in the BTL investment sector, directly affecting the costs of buy-to-let.

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      Costs Could be Much Higher For Low EPC Rating Households

      Rightmove’s analysis suggests that homes with higher energy ratings have lower energy bills on average. EPC ratings measure a property’s energy efficiency, giving a rating of A (most energy efficient) to G (least energy efficient).

      According to their research, the 10% energy cap rise means that an A-rated home is likely to see bills rise by £56 annually, while a G-rated household could be hit with an increase of £558.

      The current average EPC rating for properties in the UK is D, and Rightmove calculations show that D-rated homes will see a £225 increase in yearly energy bills on average.

      These figures show significant variation in projected price rises depending on the EPC rating of the home, underscoring the importance of energy efficiency, especially at a time when energy bills are particularly high.

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      Rising Energy Prices Leading Renters to Energy Efficient Properties

      Research has shown that the growing interest in energy efficient properties from renters is not just due to concern for the environment.

      Many tenants in the private rental sector are also looking for ways to keep their energy bill down, and this is factoring into their search when considering a new home.

      Tim Bannister, Property Expert at Rightmove, commented: “The rising price of energy in recent years means that renters and homeowners are likely having to closely consider their total monthly outgoings when choosing their next home. We know that lower bills is one of the biggest motivators for people to go greener, so we expect over time people will increasingly seek out more energy efficient properties to keep bills down over the long-term.”

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      Author

      Jessica Ferris

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      Jessica Ferris is a property writer at RWinvest, helping our readers stay ahead of property market trends with the latest news and statistics.

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