Halifax warns homeowners with houses built before this year could face penalties

Homeowners dealing with older, less energy-efficient properties could face new penalties as part of the UK's net zero initiative. Halifax has introduced a new system that will determine its lending amount based on a property's Energy Performance Certificate (EPC) rating.

Properties with poor EPC ratings are presumed to have higher running costs for heating, hot water, and cooking, which would leave potential buyers with less money for mortgage repayments. These factors will be considered when banks and building societies, like Halifax, decide their lending limits.

This change, expected to be adopted by other financial institutions, could lead to a two-tier market favouring newer properties over older ones lacking in insulation, double-glazing, solar panels or heat pumps. It may become more challenging to secure loans for homes built before 1919, where significant investment may be required to make green improvements and reduce energy bills.

A property's energy efficiency is graded from A to G on an EPC, with A being the most efficient. Customers with high EPC ratings, such as A or B, are assumed to have lower energy costs and may see a slight increase in the maximum loan available on the property.

Halifax has warned that homebuyers seeking properties with low energy performance ratings, such as F or G, may face reduced loan amounts. This potential clampdown could result in the devaluation of less insulated and older properties, making larger loans out of reach for some buyers, reports the Express.

The use of Energy Performance Certificates (EPCs) by mortgage lenders is expected to stir controversy, as doubts have been cast on their accuracy by the consumer watchdog Which?

, and "weaknesses" in the system have been