Landlords renting their property in the UK are expected to have an energy performance certificate (EPC), which confirms how energy-efficient the property is.
What is an Energy Performance Certificate?
An EPC gives detailed information about your property’s energy efficiency and carbon dioxide emissions. They were first introduced in England and Wales in 2007 and they are valid for 10 years, so depending on when you bought the property, you may still have a valid EPC.
An assessor will carry out a full inspection and the property will be given an energy-efficiency grade between A and G, with A being the best (he most energy-efficient) and G being the worst (least efficient). Click here to view an EPC sample.
Your EPC will also come with a recommendation report containing advice and improvements that will make your property more energy-efficient.
As a landlord, you have a legal responsibility to carry out the changes suggested in your EPC report and you may spend up to a maximum of £3,500 on these energy efficiency improvements, including any funding or grants given by the government, local authorities or energy companies.
If your suggested improvements exceed £3,500, you can apply for a high-cost exemption via the PRS Exemptions Register.
What are the current EPC requirements?
The Minimum Energy Efficiency Standard regulations set a minimum energy efficiency standard of Energy Performance Rating E for domestic private rented properties in England and Wales however the Government has committed to upgrading as many private rented sector homes as possible to an EPC Band C by 2030, where practical, cost-effective and affordable.
When do I need to renew my EPC?
If an EPC expires after the 10-year period, landlords are not automatically required to get a new one unless you intend to let to a new tenant, or you wish to sell the property. Remember, you are legally required to provide your tenant with a copy of the EPC.
What are the new EPC regulations for landlords in 2021?
So in 2021, changes to the Minimum Energy Efficiency Standards were announced that will affect landlords and rentals from 2025.
The Government’s preferred policy scenario which is currently under consultation for improving the energy performance of privately rented homes comprises of four elements:
The findings of the Government’s consultation are expected to be published in 2022.
How can landlords prepare for the new 2025 EPC regulations?
The government have recommended a “fabric first” approach, which includes covering a wall, loft and floor insulation. The installation of a smart meter is also recommended. It is important to note that energy performance investment is currently capped at £3,500 for landlords, but as the higher EPC rating will require a greater investment, the cap will be raised to £10,000.
The government estimate that on average the improvement needed to reach an EPC rating of “C” will cost landlords around £4,700.
As you can imagine, achieving an EPC rating of ‘C’ will be more difficult than an ‘E’, especially if you have a property, so landlords are encouraged to apply for the Green Homes Grant where possible.
What happens if I don’t have an EPC?
You may be fined up to £5,000 by your local authorities if you are found to have no EPC, however, when the regulations are updated in 2025, the penalty for not having a valid EPC of ‘C’ or above will be raised to £30,000.
Also, remember that EPC requirements aren’t the only announcement for landlords in 2021 as mandatory electrical safety inspections came into force in April. Click here to read about these changes.
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