Homes with poor energy efficiency are expected to become significantly more expensive to heat as the energy price cap rises, according to a new study. Households in properties with an Energy Performance Certificate (EPC) rating of E or lower could see their heating bills increase by at least £320 annually compared to those in homes with a C rating. For the 1.5 million homes rated F or G, the extra cost could rise to £390.
The study, conducted by Shrinking Footprints as part of The Economy 2030 Inquiry, estimates that the total “leaky homes surcharge” will add £3.9 billion to the energy bills of homes rated D to G when the price cap increases. The report emphasizes that while inefficient homes have always been more costly to heat, the upcoming changes will make these costs even more pronounced.
To address the issue, the government has proposed requiring newly built homes to install heat pumps from 2025. However, experts warn that heat pumps are less effective in properties with poor insulation, raising concerns that many homeowners will not see the intended energy savings.
Another proposal aims to mandate that privately rented homes meet at least a C rating by 2028. Despite this, no clear plan has been outlined for the two-thirds of homes that are owner-occupied. The study found that 72% of low-income homeowners will need insulation upgrades, yet the estimated cost of £8,600 is nearly equal to their annual post-housing-cost income of £9,100, making such improvements financially challenging.
Jonny Marshall, a senior economist at the Resolution Foundation, highlighted the increasing role of energy efficiency in reducing costs and emissions.
“This long-term insulation challenge will be brought home to households very soon when energy bills rise by 50% in April. Almost six million households will face a £320 ‘leaky homes surcharge’ on their energy usage as a result,” he said.
The report calls on the government to accelerate efforts to improve insulation and lower the cost of energy-saving upgrades. Without significant intervention, millions of households could struggle with rising energy bills, worsening the financial strain on low-income families.
Source ; Property Express News – Joycelyn Marigold
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