Energy-efficient homes could be more exposed to climate-related risks than less efficient properties, raising concerns for lenders and the wider housing market.
Analysis from TwentyCi suggests homes with stronger EPC ratings are more likely to face flooding and subsidence risks over the coming decades.
The data shows that properties rated EPC A–C collectively carry a higher exposure to both flood and subsidence risk than homes rated D–G, challenging assumptions that energy efficiency aligns with overall resilience.
B-rated homes in particular stand out. Around 5.27% are already classified as high flood risk, rising to 6.52% by 2055 – equivalent to more than two million properties nationwide.
SUBSIDENCE RISK
Subsidence risk is even more pronounced. Currently, 6.74% of B-rated homes are exposed, but this is forecast to surge to 23.29% by 2055, impacting an estimated 7.4 million properties.
In total, nearly 9.5 million energy-efficient homes are expected to face significant exposure to either flooding or subsidence over the next 30 years.
While lower-rated EPC properties still show higher individual exposure in some areas – with G-rated homes currently the most at risk of flooding – the overall volume of risk sits more heavily within the more energy-efficient parts of the housing stock.
The findings highlight a growing disconnect between energy performance and physical climate resilience, at a time when policy and lending decisions are increasingly driven by EPC ratings.
LENDER BLIND SPOT
Colin Bradshaw, CEO at TwentyCi, says: “While Energy Performance Certificate (EPC) ratings remain a critical tool in assessing mortgage suitability, analysis of UK residential property data shows they do not reliably indicate exposure to key environmental risks such as flooding and ground instability.
“In fact, some of the UK’s most energy-efficient homes are also among the most vulnerable to flooding and subsidence. For lenders, that creates a potential blind spot in portfolio risk.
“As climate pressures intensify, the data underscores the need for a more holistic approach to mortgage underwriting. Relying solely on EPC ratings could leave lenders exposed to hidden risks, particularly within segments of the housing market traditionally considered ‘safe’.”
