As we grow more and more concerned with the effect that we are having on the environment, one of the major ways that the government is looking to reduce our impact on the planet is to look at the energy efficiency of properties. This, added to the growing price of energy is the reason why laws are in place for landlords to ensure a certain level of energy efficiency in their properties.
An EPC (Energy Performance Certificate) is the way that energy efficiency is monitored in a property. It involves an assessment carried out by a qualified assessor after which a rating is given to the property. The rating is between ‘A’ and ‘G’ (with ‘A’ being the most energy efficient, and ‘G’ the least) and this gives an overall picture of the energy efficiency of the property.
EPC Rating for a Rented Property
Since the law changed in 2018, the minimum EPC rating for a rented property is an ‘E’ rating. The last stipulates that an EPC must be provided to new tenants when they move in so that they are aware of its EPC rating and should be included within the rental documentation.
Having said this, the rules are expected to change in the near future:
1st April 2023 – the requirement for an ‘E’ rating was only applicable to new tenants. However, from 1st April 2023, this will also become a requirement for existing tenants, meaning that all rental properties will be included (unless there is an exemption).
1st April 2025 – the minimum requirement of an ‘E’ rating is going to change to a minimum of a ‘C’ rating. If this is not possible for them, landlords will have until 1st April 2027 to carry out the necessary upgrades to their properties.
1st April 2028 – the government plans to raise the minimum requirement to an EPC rating of a ‘B’ as part of their net zero target for 2050, in April 2028.
It is also worth noting for landlords that the £5,000 fine that now stands for the failure to have a valid EPC is set to rise to £30,000 by 2025.
EPCs for Rented Properties
When an EPC assessment is carried out, the inspector looks at a range of different aspects of the energy efficiency of the property including the house type, its age, and its construction. These all go towards the EPC rating that the property is given and they will also then give you some recommendations about how you can improve this rating.
Some of the measures that may be recommended that can improve your EPC rating include:
- Updating your boiler
- Insulation (cavity wall, loft, floor)
- Double glazing/triple glazing
- Implementing renewable energy sources
An EPC lasts for 10 years and is registered on a government database – unless you are selling the property, in which case the EPC inspection must have been carried out within the 12 months prior to the creation of the Home Information Pack.
It is important to be aware that you cannot charge the tenant for the Energy Performance Certificate.
The Benefits of a Good EPC Rating for Landlords
As a landlord, you might think that the energy efficiency rating of your property has nothing to do with you. It couldn’t be further from the case, however. Having a good EPC rating is very beneficial to you for a number of reasons:
- First and foremost, it is the best for the planet. It is important that we all play our part to reduce our carbon footprints and cut energy emissions. As a landlord, you have the responsibility of doing this both for yourself and your tenant.
- A good energy efficiency rating is a great way to attract conscientious tenants.
- Lower energy bills mean happier tenants and more of a chance that will stay in your property.
- A well-maintained property with good energy efficiency means fewer problems such as freezing pipes, condensation, and damp, reducing maintenance in the long run.
There are occasionally instances when an EPC is not required. These are:
- When a building is listed and any energy efficiency improvements would unacceptably alter the building
- If the building is temporary (only to be used for up to 2 years)
- If it is a residential building to be used for less than 4 months every year
- If it is a place of worship or used for other religious activities
- If it is an industrial site, workshop, or non-residential agricultural building that does not use much energy
- If the seller or landlord is going to demolish the building