New build advertised and represented as A rated but EPC is B. Next steps?!

[GreenFinch26]

We are in the process of purchasing a new build which was advertised and represented to us during viewings as being A rated. We agreed a purchase price, which was partly driven by this rating. During the conveyancing process, we saw the EPC actually certifies the property as a B, albeit a high B.
We gave the developer the option of either getting the property to A or adjusting the purchase price. The developer initially offered to install two WWHRS - sensible solutions given the EPC scored the existing water heating as average - but before we had a chance to decide, then confirmed that retrofitting these would be too destructive to the current finish so would prefer not to do the work. We were offered the equivalent cost of the work (£5,000) as a deduction on our purchase price. This equates to 0.5%.

We don’t feel this adequately reflects the discrepancy between the EPC that was advertised and the actual EPC. An A rating is clearly hard to achieve and relatively rare in new builds, hence why we were prepared to pay a premium. Now that the developer has decided the remediation option isn’t that workable, we’re left with a lesser spec and a small price adjustment by way of compensation.

We don’t want to play hardball here but equally want to achieve a fair, commercial outcome. We understand the legal position of misrepresentation but do not want to be adversarial as would ultimately like to still purchase the property. Any advice would be welcome, please.

It’s a frustrating position to be in, especially when the rating clearly influenced your decision.

One thing that might be worth bearing in mind: EPC ratings aren’t a reliable reflection of how a home actually performs in real life.

There’s a well-documented issue in UK new builds called the “energy performance gap”.

It’s where new homes use more energy than predicted at the design stage. In some cases, studies have found around a 60% difference between predicted and actual energy use. That’s why people in new homes sometimes end up with higher bills, condensation, poor air quality, or homes that are too hot in summer and too cold in winter.

The only new builds that consistently close that gap is certified Passivhaus homes (or Passive House). It’s a global gold building standard where:

• the home is designed by a certified Passivhaus designer
• built by Passivhaus certified tradespeople
• and independently tested and verified before certification

Because of that level of rigour, performance tends to match the design very closely. A University of Bath study looking at UK Passivhaus homes found little to no performance gap at all.

Not saying that helps your immediate negotiation directly, but it might explain why the difference between an A and a B on an EPC doesn’t always translate as cleanly into real-world performance as you’d expect.

On the one hand, I am a bit skeptical that other buyers would especially know / care about the diff in A/B, or if it wasn’t blended the way it is 92 vs 90 points.

On the other hand, the developers clearly recognise that £5k is insufficient to do that work and make good. Is there some other action they could take to boost the rating? If they’d offered £10k would you feel that’s better compo? If so just say that?

The current rating system is due a revamp next year and in any event is a little outdated as it’s based on the cost of fuel rather than modern methodology of efficiency and carbon footprint.

Personally I wouldn’t lose sleep over a high B. What fuel source will the property have?

Thanks all for taking the time to respond. The house uses ASHP and PV for energy, which is what we were looking for. We’d previously planned to self-build with a view to achieving close to Passivhaus standards as are keen on having an energy efficient, future-proofed home. We do recognise the difference in efficiency and cost savings between an A and a B is very small but we agreed to purchase the house at a certain amount on the basis it was advertised, and represented during our viewings, as being A-rated. Given its extremely hard and rare to achieve that rating in new builds, it was a significant driver in us agreeing to pay a certain price. It was a key selling point in the marketing so very misleading to those who do care about these things!

You only have two choices, get the developer to meet your new price expectation or pull out.

How much money have you spent on the move so far?

Well, it’s legal fees for buying the house and selling our own so not insignificant. Our buyers want to exchange and complete soon so we either come to an agreement with the developer to proceed with our purchase, or walk away with nowhere to move to unless we rent while we find something else, which would be an unexpected extra cost. As you say, it’s a case of agreeing an appropriate price adjustment or walking away. The alternative is to get the developer to find another solution to get the house to an A. All very annoying! Neither the agent nor the developer seem to understand just how serious it is to misrepresent the house at marketing stage despite all the legislation. 🤔

I'd see if you can get independent advice from a valuer on the likely difference in value and use that in your negotiations.

And /or cost up how much it would cost you to do the extra bits to get it to an A and ask for that amount plus a bit for the inconvenience

If the developer has offered £5k that won't be the amount they expect to settle at

Equally it sounds like you need speed more than they do

Could you due contracter for false misrepresentation? I'd seek proper legal advice.

This happened to us over 10 years ago on a new build but we had completed on the purchase before the 'real' EPC became available.
If you ask AI, it is not uncommon for there to be a discrepancy and apparently houses with heat pumps can get lower ratings than gas heated ones, because of the way the EPC is calculated. This doesn't mean the house is less energy efficient in reality.
I think you would be foolish to pull out just because of this, if it is your dream house in every other way.

Personally I would ask for a storage battery extension. If you use that £5000 to get them to add another 10kw/12kw of capacity. You can fill your house batteries at cheap night rate (6.5p with Octopus) and probably won't need to buy any, or very little, electricity at normal price. This may not move the epc but will save you serious money on your electricity bill. If the solar system is producing extra capacity in the day you can sell that back to the grid, again through Octopus energy. You could potentially have a zero cost electricity bill in summer and only a small winter bill if you have enough storage capacity.
How much storage capacity is the current standard fit ?

We have this, it is great and we sell back to the grid on top of generating our own electricity. The standing charge is a bit of a pig though, and the rate we sell back to octopus has just been cut. It’s likely to be cut further once more people get solar panels

Is the existing battery capacity big enough to cover a 24 hour cycle with zero peak rate draw ? That was my point, as new build systems are often very mean with the storage capacity. Obviously because its the most expensive component - but also the one that gives the most flexibility to the consumer to maximise savings. In general they fit the smallest storage possible to tick the box. How much capacity to you have in the new build ?

I think their offer sounds reasonable.

Thank you - that’s what we’d been thinking too as there isn’t one at all at the moment plus I would have thought it would be easier to retrofit. What would you recommend by way of storage capacity?

Is the house fully built? Is it definitely an EPC you’ve been given or a PEA? I had this before when I worked in new builds that the homes were all A rated and the predicted energy assessment came back as a B- it was easily rectified as their prediction was inaccurate as the house wasn’t finished.

Hi - yes, it was completed back in January and EPC conducted after completion and again when we challenged the rating.

Oh, if they didn't add any storage capacity at all that's not a great way to do it. Normally an efficient cost saving system would have 10 to 12kw of storage for a 3 bed. It seems many developers are cheaping out on this step to tick boxes for "green designs" but these cheap options don't save the consumer so much money on energy. To really cut bills you need a bit of overcapacity. 15kw probably.
Your looking at £10k to put in that from scratch, its unfortunate because if they had included a basic 6 or 8kw storage that could have been easily expanded to 12kw to 15kw for your £5k. Meaning you almost never buy electric at peak rate.

That’s super helpful, thanks so much for your advice. I guess we could still push for them to incorporate battery storage if they don’t want to reduce the price as it would be more beneficial to us in the long term. Appreciate your help, thank you.

Technically this is an option but not sure the benefit would outweigh the cost / hassle of doing so. Plus we would ideally still like to buy the house and remain on decent terms with all parties. 😊