You are selling, buying or financing a home rated F or G, and you hear about “new European valuation standards”. TEGOVA’s European Valuation Standards 2025, in force since 1 January 2025, do change the way an expert treats energy performance and the value banks rely on. This article explains what changes in practice, with a worked example, and what is simply continuity.
What the EVS are
The European Valuation Standards (EVS) are the valuation standards published by TEGOVA, the European association of valuers’ organisations (tegova.org). Valuers certified REV (Recognised European Valuer) and TRV (TEGOVA Residential Valuer) undertake to apply them. The Charte de l’expertise en évaluation immobilière (the French property valuation charter), in its 6th edition of November 2025, refers to them explicitly and adopts the same definition of market value.
EVS 1 defines market value as the estimated amount for which a property should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing, where the parties had each acted knowledgeably, prudently and without compulsion. This definition is taken from the European regulation on banks’ capital requirements (Regulation (EU) No 575/2013, known as the CRR).
Two reasons explain the 2025 revision: European legislation on the energy performance of buildings, and the revision of the CRR by Regulation (EU) 2024/1623, which requires banks to apply prudent valuation criteria to their property collateral.
What changes for a poorly rated property
The EVS 6 rule
EVS 6, “Valuation and Energy Efficiency”, is new. It distinguishes two situations (§ 6.1).
Where no legal deadline affects the right to use or sell the property because of its energy class, and enough comparable transactions exist, the valuer values by comparison, without having to cost any works. The market itself prices in the rating.
Where a legal deadline exists, for example a ban on letting unless a given class is reached, the valuer must, in most cases, use the residual method:
- compare the property’s current class with the one required at the next deadline;
- estimate the market value of the property on the assumption that it had been renovated to that class, from comparable properties of that class;
- deduct from that value the cost of the necessary renovation;
- where appropriate, depending on the scale of the works and market practice, deduct financing costs, fees and a margin.
In France, the deadline exists for rented homes: law no. 2021-1104 of 22 August 2021 bans the letting of homes rated G from 1 January 2025, F from 2028 and E from 2034. It does not concern owner-occupation.
Worked example
A 120 m² house rated G, intended for letting:
- value by comparison with houses of the same class, ignoring the deadline: €300,000;
- estimated value after renovation to class C, by comparison with houses of that class: €320,000;
- cost of the works (insulation, heating): €60,000;
- residual value: €320,000 − €60,000 = €260,000.
The €40,000 gap between the first approach and the second measures what the market for comparable properties has not yet priced in, or what a buyer aware of the deadline will deduct. The expert explains in the report which of the two approaches is adopted and why.
A practical point: EVS 6 states that the valuer may rely on the estimate of the cost of works in the energy performance certificate, if it is recent and of sufficient quality. In France, the energy audit, compulsory for the sale of certain poorly rated houses, plays this role. Failing that, a contractor’s quote remains the best basis.
What changes for your mortgage
Prudent value
The revised CRR requires banks to value their collateral according to “prudently conservative valuation criteria”. Guidance note EVGN 2 of the EVS 2025 details how this applies. This prudent value, which the Charte describes in § 1.16:
- excludes any expectation of price increases;
- is adjusted when the current market value appears significantly above what would be sustainable over the life of the loan;
- applies mainly to valuations carried out for a regulated mortgage loan.
The Charte specifies that prudent value is not a stand-alone basis of value but a methodology applied from market value. In practice, a report intended for a bank may contain two figures: market value and prudent value, the latter being used to calculate the loan-to-value ratio.
Consequences for the borrower
A property whose value depends on future renovation, or whose local market is rising fast, will see its prudent value diverge from its market value. This can reduce the amount that can be borrowed or lead the bank to ask for a larger deposit. Energy performance becomes an explicit risk parameter, alongside location and general condition.
What changes in the report
EVS 4 (valuation process and terms of engagement) and EVS 5 (reporting) have not been overhauled, but Part VI of the EVS 2025, on valuation and sustainability, has been thoroughly revised. It asks the valuer to consider physical climate risks (flooding, drought, fire) and transition risks (regulation, energy obsolescence) where they are likely to influence value.
In practice, a report compliant with the EVS 2025 and the Charte contains, for a residential property:
- the energy class, the date of the certificate and the calculation method applied;
- the applicable regulatory deadline, depending on whether the property is let or owner-occupied;
- the estimated cost of works where the residual method is used, with its source;
- exposure to known natural hazards.
The Charte recalls in parallel (Title IV, § 1.6) that the DPE (diagnostic de performance énergétique, the French energy performance certificate) rests on a conventional calculation that does not measure actual consumption. Bills for recent years, when the owner agrees to provide them, usefully complete the analysis. They are not compulsory, but they are informative.
What this means depending on your situation
Owner-occupier. No obligation to carry out works applies to you. Check the class and the date of your DPE (valid for ten years); if the property is rated F or G, a study of the priority works will give you a useful order of magnitude for a future sale.
Landlord. The deadline applies to you. An energy audit, quotes and a financing plan including public subsidies are the three usual steps before deciding between works and sale.
Buyer. Ask for the DPE, the audit if there is one, and quotes. Check the technical and regulatory feasibility of improvements (co-ownership, protected area). The cost of the works is an objective element in the discussion on price.
Investor. Discounted properties needing renovation may be of interest if the calculation includes all compliance costs, timescales and the risk that requirements change. The residual method of EVS 6 is precisely the tool for that calculation.
Frequently asked questions
My property is rated E, should I be concerned? Not immediately if it is owner-occupied or let until 2034. A well-located E-rated property in good condition keeps its appeal; the deadline is to be anticipated, not suffered.
Are the works worth it? That depends on the property, the local market and the cost of the works. Comparing the value after renovation with the cost of the works, as the residual method does, answers the question case by case. The Charte recalls in this respect that “green value” does not exist as such, but that environmental criteria can have a positive or negative effect depending on the market (§ 1.17).
Do these rules apply across Europe? The EVS are common; the regulatory deadlines are national. In France, they tie in with the rules on the decency of rented homes.
The essentials
The EVS 2025 do not change the definition of value, but they specify how to treat energy performance when a legal deadline weighs on the property, and they introduce prudent value for lending. For the reader, the lesson is simple: knowing your property’s class, the deadline attached to it and the cost of the works already gives you the three pieces of information the expert needs.
Further reading
The Market value page describes the method and the report. On the same theme, you can read What a valuation report contains and Energy certificate reform 2026: what impact on market value?.
What next
Do you need a value that will stand up before a notaire, a judge or the tax authorities?
Inheritance, divorce, gift, tax audit, guardianship: I tell you which report you need, in what timeframe and at what price.
Free quote, by email or by phone. No commitment before the quote is accepted. Fees are never linked to the value of the property (Charte de l’expertise, Title I, §2.1).
