Energy rating and thermal sieves: how DPE impacts purchase price and renovation budget

Energy rating, thermal sieves and renovation budget: a key piece in the buy or rent puzzle

In many European markets, and especially in France, the energy performance certificate (DPE) has become a central factor when deciding whether to buy or rent. A property rated F or G – a so‑called thermal sieve – often sells at a discount of 10–25 %, but usually comes with a very high renovation budget.

The real question is no longer just “is this property cheap?”, but rather “how much will I need to spend on energy renovation, and does that still make buying more attractive than renting?”

Using concrete numerical examples, this article explains how:

• the energy rating affects purchase price and negotiation power
• the renovation cost can completely change the buy or rent calculation
• to use the renovation budget parameter (montant_travaux) in a buy or rent simulator like buy-or-rent.net / acheter-ou-louer.com

Important: all figures below are general and educational. They are not personalised financial advice.

1. What is a thermal sieve and why does the rating matter so much?

The energy rating (DPE or EPC) ranks homes from A (very efficient) to G (very inefficient), based on energy use and CO₂ emissions. Properties in classes F and G are commonly called thermal sieves.

1.1. Typical energy use by rating

For a 60 m² flat, typical consumption levels are:

• Rating B: ~50 kWh/m²/year → 3,000 kWh/year
• Rating D: ~180 kWh/m²/year → 10,800 kWh/year
• Rating F: ~330 kWh/m²/year → 19,800 kWh/year
• Rating G: >420 kWh/m²/year → 25,200 kWh/year or more

With electricity around €0.20/kWh, the annual bill can range from roughly €600 to over €5,000 depending on the rating and heating system. That gap directly impacts the property’s value and the buy or rent comparison.

1.2. Regulatory pressure on inefficient rentals

In France and an increasing number of EU countries, rental rules are tightening for thermal sieves:

• Most energy‑guzzling homes are being progressively banned from new rentals.
• Future deadlines will restrict or forbid letting F and then G‑rated homes unless they are upgraded.

For an investor, buying a thermal sieve without budgeting a proper renovation means running the risk of being unable to rent it out in a few years. That is why the renovation budget (montant_travaux) is a core parameter in any serious buy or rent analysis.

2. How an F or G rating affects the purchase price

In many cities, thermal sieves trade at a discount compared with efficient homes, but the size of that discount varies a lot by location and market cycle.

2.1. Numerical example: same size, different rating

Assume a mid‑sized city where modern, efficient flats (rating B or C) sell for about €4,000/m².

• 60 m² flat, rating C: price = 60 × 4,000 = €240,000
• 60 m² flat, rating F: 15 % discount → €204,000

You save €36,000 at purchase. But that saving must be compared with the renovation budget required to bring the property out of F/G territory.

2.2. Price discount vs. energy renovation cost

The cost of an energy renovation depends on the property and the target rating: insulation, windows, heating, ventilation, and sometimes a full deep retrofit.

For a 60 m² flat, typical ranges might be:

• Wall insulation (internal or external): €10,000–25,000
• New windows (6–8 units): €6,000–10,000
• Heating upgrade (old gas boiler → heat pump): €10,000–18,000
• Ventilation (mechanical system): €2,000–4,000

A comprehensive upgrade to move from F to C can easily reach €800–1,000/m², i.e. €48,000–60,000 for 60 m².

In our example, the €36,000 discount does not fully cover that renovation budget. This is exactly what the montant_travaux input in a buy or rent simulator like acheter-ou-louer.com is designed to capture.

3. Renovation budget: a core parameter in a buy or rent simulator

When you compare buying a thermal sieve with renting a more efficient place, the renovation cost is just as important as the purchase price or the mortgage rate.

3.1. How to factor renovation into your decision

A robust approach should:

• estimate the total VAT‑included cost of works (using several quotes)
• decide whether you will pay the works in cash or through a loan
• measure the impact on your monthly cash‑flow or on your available savings
• account for potential subsidies or grants where applicable

In the buy or rent simulator, this is captured by the montant_travaux parameter, allowing you to compare “I buy and renovate” vs “I rent and invest my capital elsewhere”.

3.2. Full example: buying a sieve vs renting

Let’s use simplified but realistic assumptions for a 60 m² flat:

• Market rent for a good‑quality, efficient flat: €900/month
• Mortgage rate: 3.6 % fixed over 25 years
• Borrower insurance: 0.30 % per year on the outstanding balance
• Annual inflation: 2.5 %
• Expected net investment return if you rent (ETFs, etc.): 4 % per year
• Old‑property notary fees: 8 %

Scenario 1: buy an efficient flat (rating C), no major works

• Price: €240,000
• Down payment: €40,000
• Loan amount: €200,000 at 3.6 % over 25 years → monthly payment ≈ €1,015 (principal + interest)
• Insurance (0.30 %): about €50/month
• Property tax: assume €1,200/year → €100/month
• Maintenance & service charges: ~€80/month

Total monthly ownership cost (cash‑flow): roughly €1,245/month, plus notary fees of 8 % × €240,000 = €19,200 upfront.

Scenario 2: buy a thermal sieve (rating F) and renovate

• Purchase price: €204,000 (15 % discount)
• Renovation budget to reach rating C: €50,000
• Notary fees (8 % of price): €16,320
• Down payment remains €40,000

You could:

• Option A – borrow €200,000 and pay most works in cash → you tie up a lot of savings and reduce your investment capacity.
• Option B – roll the works into the loan: 204,000 + 50,000 = €254,000 borrowed.

With €254,000 at 3.6 % over 25 years, the monthly payment is about €1,290 (excluding insurance), or roughly €1,350 with insurance. Add property tax and maintenance (still €180/month), and total monthly cost rises to about €1,530/month.

Scenario 3: keep renting and invest the difference

• Rent: €900/month, indexed annually by inflation or a rental index (say 2 %/year)
• Initial capital: €40,000 invested at 4 % net per year
• Additional monthly investment: difference between €1,530 (buy+reno) and €900 rent = €630/month, invested at 4 % net/year

Over 20 years, €40,000 invested at 4 % plus €630/month at 4 % can grow to roughly €280,000–300,000 (ballpark, before detailed tax). A buy or rent simulator like buy-or-rent.net lets you visualise this side by side with the equity you build in the property.

4. What kind of works are needed to escape F/G status?

For an F or G‑rated home, professionals usually recommend a package of measures rather than a single quick fix.

4.1. Typical works and cost ranges

• Loft/attic insulation: €30–60/m² → €1,500–3,000 for a small house
• Wall insulation (internal or external): €80–200/m² → €10,000–25,000
• Window replacement (single → double or triple glazing): €600–1,200 per window
• Efficient heating (heat pump, condensing boiler): €10,000–18,000
• Mechanical ventilation: €2,000–4,000

For a 100 m² house, a deep renovation from rating G to D can easily reach €40,000–80,000 after subsidies. This is the number you should enter as montant_travaux when running a buy or rent simulation.

4.2. Savings on energy bills

Take a 100 m² house as an example:

• Before works (rating G): 450 kWh/m²/year with fuel oil → 45,000 kWh/year
• Fuel equivalent cost: ~€0.12/kWh → annual bill ≈ €5,400
• After works (rating C): 150 kWh/m²/year with a heat pump → 15,000 kWh/year electricity
• Electricity at €0.20/kWh → annual bill ≈ €3,000

Approximate annual saving: €2,400. If the renovation budget is €60,000, the simple payback time is 25 years (€60,000 / €2,400), ignoring future energy price hikes and property value uplift. These numbers show why the renovation budget must be part of any serious buy or rent calculation.

5. Energy rating and buy or rent strategy: how to think about it

There is no universal answer to whether it is better to buy or rent in the presence of a thermal sieve: it depends entirely on your situation, your time horizon and your local market. However, you can structure your thinking using a few key questions.

5.1. Questions to ask before buying a thermal sieve

• How long do you plan to stay in the property (5, 10, 20 years)?
• Can you realistically handle major works (cost, disruption, project management)?
• Does the price discount really cover the full renovation budget needed to reach at least a D rating?
• Are you eligible for significant energy renovation subsidies?
• If you remain a tenant, what net return can you expect on your investments (3, 4, 5 %)?

A buy or rent simulator where you can adjust the montant_travaux and investment return helps you see at what point buying and renovating becomes more attractive than renting, or not.

5.2. Example: when renovation can make financial sense

Suppose that in your city, the discount on thermal sieves is much stronger: 25 % instead of 15 %.

• Efficient flat (rating C): €240,000
• Thermal sieve (rating F): –25 % → €180,000
• Price discount: €60,000
• Renovation budget to move from F to C: €50,000

In this case, you buy €60,000 cheaper, invest €50,000 in works and end up with a renovated C‑rated flat for a total of €230,000 (excluding notary fees). You effectively gain €10,000 of margin compared with buying a ready‑to‑go C‑rated flat, in exchange for taking on the renovation risk and hassle.

If the discount is only 10 % (purchase price €216,000), with the same €50,000 renovation budget, your total cost rises to €266,000, i.e. more expensive than a C‑rated flat at €240,000. In that scenario, from a purely financial angle, the renovation is a losing proposition unless you place a high value on other factors (location, layout, future potential).

6. Using the renovation budget parameter in a buy or rent simulator

On acheter-ou-louer.com / buy-or-rent.net, the montant_travaux input lets you simulate precisely how energy renovation impacts your buy or rent decision.

6.1. Practical steps

• Step 1: get several quotes to estimate a realistic renovation budget.
• Step 2: add a 10–20 % contingency for surprises and overruns.
• Step 3: enter this figure in the montant_travaux field.
• Step 4: run two versions: works financed by the mortgage vs paid from savings.
• Step 5: compare with a scenario where you keep renting and invest the monthly savings at your expected rate of return.

By adjusting this parameter, you can see whether buying a thermal sieve and renovating it stacks up financially against renting an efficient home.

6.2. Don’t forget the other parameters

The renovation budget is only one piece of the puzzle. A complete buy or rent analysis should also consider:

• the mortgage rate (currently around 3.6 % in many eurozone markets)
• notary and closing fees (7–8 % for existing properties)
• agency fees (often 3–5 %)
• property tax and its annual revaluation
• inflation and expected rent increases
• your investment return if you choose to rent and invest instead of buying

It is the combination of all these parameters – not the energy rating alone – that should guide your buy or rent decision.

Conclusion: energy rating is crucial, but not the only driver

The DPE rating and the notion of a thermal sieve have a major impact on purchase price, long‑term ownership costs and the relevance of buying vs renting. A discount at purchase can be attractive, but it must always be weighed against the true renovation budget required to escape the F/G category.

Depending on your profile, your time horizon, your appetite for managing works and your alternative investment opportunities, the most rational choice may differ. There is no one‑size‑fits‑all answer: it always depends on your personal situation.

The most objective way to decide is to simulate several scenarios, plugging a realistic montant_travaux into a buy or rent calculator, with and without financing, and comparing that to a rental + investment strategy.

Want to know whether, in your specific case, it makes more sense to buy or rent a poorly rated property? Simulate your situation on buy-or-rent.net (or acheter-ou-louer.com).