An Energy Performance Certificate (EPC) is a legal requirement when renting/buying a home. They tell you how efficient a property is with an A-G system – with A being very efficient, and G being very inefficient. An accredited domestic energy assessor must conduct all EPCs. Assessors can be found via the government’s official register for valid contractors in your area.
From 1st Aril 2020, the government made it law that new and existing tenancies in England and Wales could not be in existence without an EPC rating of E or above. Failing to comply would result in a fine of up £5000 per property for landlords who signed/ renewed a tenancy.
It has now been just over a year on and the government has announced new legislation that would mean all new tenancies must be Band C or higher by 2025. Got an existing tenancy long-term tenancy? They must be compliant by 2028. The government brought in these laws to meet the government’s net-zero waste targets in reducing carbon waste and consumption.
What Does This Mean for Landlords
A valid EPC must be in place at all times while the property is being let (and landlords can be fined for not having one). For now, this can be an EPC of a minimum of Band E. However, landlords will not be able to start a new tenancy or renew an existing one from 2028 without an EPC Band of at least C and would risk a fine for doing so.
- Properties will be cheaper to heat for tenants, helping to put an end to fuel poverty.
- More energy efficient property options for tenants.
- It is better for the environment. Energy efficient homes will help the UK government to reach the ambitious climate change target of reducing emissions by 78% by 2035 compared to levels in 1990.
- There is no funding for private landlords and changes can be expensive.
- It has only been 12 months since the Government said all rentals had to be an EPC Band E. Many landlords have just finished altering their properties (and investing money) in accordance with this and will now have to invest more to be in line with the law.
- Listed buildings will struggle to comply without altering the character or appearance of the property. This will potentially push landlords to sell properties due to it being cheaper than bringing them in line with new laws.
Landlords must insulate their properties to retain heat. In the case of properties that cannot be (i.e. listed/graded properties), other features must be used to improve energy efficiency.
These include the following:
- Install LED lightbulbs.
- Increase windows to double or triple glazing. However, listed properties may not be eligible for this which could cause issues for landlords.
- Install an energy-efficient boiler.
- Use a smart meter.
Some changes to properties (particularly listed ones) could end up costing close to a yearly rent for landlords. Because of this, there is fear that many will simply cut their losses and sell their properties. This could mean that there may be a shortage of rental properties. However, it will mean that tenants no longer have to compromise on energy efficiency.
Landlords – particularly those affected by lockdowns and rent arrears – may be more welcoming to the new EPC rates if the government introduces a funding scheme. This in turn would have fewer repercussions on the rental market.
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