In the Spotlight with Trudy Woolf, L&G Surveying Services

FR: You were recently appointed sustainability director; can you tell us a bit more about what your new role entails and how you are involved in climate change and sustainability?

In my new role as sustainability director, I am responsible for the management and development of Legal & General Surveying Services’ sustainability offerings, technical advice and risk functions, including leading its specialist high level client and industry technical relationships. I am also responsible for the professional services team, delivering outstanding technical support and risk management for lender clients.

FR: Are EPCs influencing consumers’ when purchasing and selling properties? And should EPCs be reflected in valuations?

Anecdotally, people are becoming increasingly aware of EPCs, when they do their initial online search for a property. Given the recent heatwave, and increasing pressure on consumer finances with rising bills, they are taking a broader range of factors into account, including EPC scores and the energy usage of a property before making their purchasing decision.

As a result, we may start to see that properties become more attractive to people if they have better EPC scores, and potentially could command higher asking prices. It is important to note that the market will dictate what people are willing to pay for a property, and that valuers do not set the market, they reflect it.

FR: What are the challenges and opportunities facing lenders and valuers, and how will this play out in the market?

Retrofitting energy efficient measures will be challenging for lenders and homeowners alike. Advice is fundamental in this space – given some properties may be particularly difficult to retrofit. Indeed 6.6 million properties in the UK, more than 30% of the housing stock - are built with solid walls or without cavity walls and therefore increasing the energy efficiency with wall insulation would not be possible in these homes.

There are also questions around who is going to have to pay for retrofitting, particularly in light of the rising cost of living. If that cost falls on the consumer it would not be looked upon favourably. As a result, there likely needs to be a joined-up approach from the government and lenders in order to tackle the issue.

Additionally, the UK may not have the infrastructure and resource to support mass retrofitting of homes. According to a report by the Green Alliance, only 29% of homes in the UK currently meet the UK’s current target of EPC C rating and it claims that current policy is nowhere near ambitious enough to tackle the remining 71% of homes. Many of the current measures are expensive and retrofitting is being seen as a major hassle by housebuilders, so more must be done to combine efforts and tackle the problem.

However, this all provides an opportunity for lenders and surveyors to provide sound advice for their customers on EPCs and retrofitting. Not only are they already involved heavily in the market, but they should be the first port of call for people in understanding their property’s needs and how they can improve their EPC rating.

In an ever-complex property market, one of the key challenges for lenders is that they need to keep up to date with any regulatory changes, especially in regard to EPCs. As a result, at Legal & General Surveying Services, we are engaging with lenders to help them understand their risk appetite and support with solutions to manage regulatory changes effectively.

FR: You are regularly involved in a number of residential property industry forums including for example, RICS, UKF etc across the industry - have these discussions revealed a roadmap to improving housing supply in the UK?

It is a challenging space currently, but there are a large number of industry groups looking at this from various different angles.

Importantly, a number of lenders understand they need to be making improvements to their back-book and to any future lending in order to improve the UK housing stock. However, there needs to be direction from the government which, given the conservative leadership race, has been lacking recently.

However, similarly to the government banning the sale of diesel cars by 2030, a similar impetus is needed to kickstart the transition towards improving the UK’s housing stock. Until this time, and when better EPC ratings provide better value for homeowners, consumers are less likely to make the changes to their homes themselves, especially in the current economic environment.

FR: If you could see one headline in 2022, what would it be?

“Property industry collaborates on project to improve UK housing stock by 50%”.