Updated 02 August 2022
An Energy Performance Certificate (EPC) provides a detailed picture of a property’s energy efficiency and CO2 emissions.
As a landlord, you need to ensure that your property has an EPC that meets the latest regulations — the Minimum Energy Efficiency Standards.
Here we look at EPCs in detail, the latest changes and what the future holds for landlords and tenants.
So how do you go about getting your EPC? First, you need to get an Energy Assessment Survey conducted by a Domestic Energy Assessor.
It will usually take around an hour and cost about £70 including VAT.
Essentially the inspector is looking at the interior and exterior of your property to determine how energy efficient it is, and also to see how and where efficiency can be improved.
These are the areas they will be assessing:
Roofs, walls and insulation
Boilers and heating systems
Renewable energy devices such as solar panels
Building dimensions and age
Once the inspection is complete, your assessor will create an EPC and grade your property’s energy performance.
A is the best possible score and G is the poorest. Currently, your property must achieve a valid EPC rating of E or above, or it cannot be legally let.
The latest Minimum Energy Efficiency Standards have been in play since April 2020, and they apply to all existing tenancies, not just new ones or renewals.
However, after a consultation in December 2020, the government announced new standards for England and Wales, to become law by 2025.
From this date, all rental properties will need an EPC rating of C or above. As before, these new regulations will apply to new tenancies first, followed by all tenancies from 2028.
The changes are intended to make homes much more energy efficient and reduce carbon emissions, to help the government reach its net-zero by 2050 target.
The penalty for not having a valid EPC will be raised from £5,000 as it now stands, to £30,000 by 2025.
An EPC is valid for 10 years, although when it runs out you only need to get a new one if you’re setting up a new tenancy agreement or selling your property.
Currently, there is no automatic requirement for a new EPC to be commissioned.
As a landlord, you need to give tenants at least 24 hours written notice of a visit from an assessor.
Most tenants will be happy about an energy performance assessment as it’s a legal requirement, and a property with a good energy performance rating will be more cost-efficient and comfortable to live in.
An EPC is not just about meeting guidelines — it’s fundamentally about quality of life and sustainability.
These concerns are naturally very important to tenants too. As a tenant, you are entitled to a copy of your home’s EPC and must be provided with one when you move in.
If you want to find your property’s EPC rating, simply go to the Government’s Energy Performance of Buildings Register, type in your postcode and click on your address.
It’s difficult to put a precise figure on the cost of bringing your property up to the required rating if there is work to be done.
It has been estimated that in the near future it could cost about £10,000 to bring a property rated D up to C or above.
Unfortunately, improvements on a property intended to boost EPC rating are classed as capital expenditure and not repairs and maintenance, which means they cannot be written off against profits to reduce your tax bill.
It seems likely that a proportion of private sector landlords will be put off by the increasing level of investment required to gain a valid EPC.
Rather than spend thousands meeting complex criteria, they may simply walk away. The situation is not helped by the relative confusion surrounding financial support at the moment.
There was a Green Home Grant available to landlords and homeowners, but this was not a great success, and there is no clear information about its successor yet.
There is also some suggestion of the government incentivising mortgage lenders to offer affordable finance for landlords who want to carry out green improvements, but nothing definite.
The result of this possible exodus of landlords is a smaller rental market, less choice for tenants and higher rental prices — all at a time when demand is rising rapidly.
It’s possible that your property is exempt from the Minimum Energy Efficient Standards and EPC requirements.
Here’s a list of the main exemptions:
Listed or protected buildings that would be compromised by improvements
Temporary buildings that will be used for a maximum of two years
Some workshops and industrial sites
Detached buildings with floor space of 50 metres or less
Buildings that are due to be demolished
Period properties can be much more difficult and expensive to retrofit and bring up to the required standard, and this has been acknowledged.
Currently, there is an affordability exemption for situations where changes would not be technically feasible or the cost would exceed £20,000.
There’s plenty that you can do right now to prepare for changing environmental and energy efficiency standards.
It makes sense to prepare and stay up to date with information as it emerges.
If you have properties with older EPCs, it could be well worth getting them renewed, as they might not meet the latest criteria.
You may want to review existing properties to pinpoint what work will be needed too.
If you own a number of older properties, it makes sense to begin budgeting and planning — you might find that some of them qualify for the exemption.
There are a number of online tools you can use to give you an idea of potential upgrades and costs, based on similar properties in your area.
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