Energy Performance Certificates (EPC) were introduced on 1st August 2007 as part of Home Information Packs (HIPs) for domestic properties with four or more bedrooms as an attempt to make people become more aware of the energy that a building uses. Over time this requirement was extended to smaller properties. When the HIP was removed in May 2010 the EPC remained.
To produce an EPC, your property is visited by a Qualified and Accredited energy assessor who examines key items such as cavity wall, floor and loft insulation, domestic boiler, hot water tank, radiators, heating controls, windows for double glazing, and so on. They then input the observations into a software program which performs the calculation of energy efficiency, producing a certificate. Working on a graded scale from an ‘A’ rating being the most energy efficient, to a ‘G’ rating being the least energy efficient.
The certificate lasts for 10 years when issued and the assessor also suggests recommendations and advice to the property owner of how to improve the rating.
On 1st April 2018 the UK government issued new guidelines that raised the minimum rating of ‘E’ for all privately rented properties throughout England and Wales and banned any privately rented properties with a ‘F’ and ‘G’ rating from the private rental sector.
In line with the governments promise of net-carbon zero targets for 2050 they have pledged that all rental properties will need to be raised to a minimum of a ‘C’ rating by 2025. But recently this has changed due to the interference of Covid 19 and has been put back a year with the new higher rating coming into force potentially in April 2026 for all new tenancies and any existing tenancies will have until April 2028. This again is not a guaranteed date, although these changes will happen, the timing is not yet set in stone.
As Landlords absorb this information and the effects that it may have on them personally, the changes will have a definite impact on the rental sector as a whole. Along with the financial impact to ensure that private rental landlords bring their properties up to standard, with the risk of a hefty fine or not being able to rent at all, Landlords will not have a choice but to make the necessary changes.
Concerns have been made regarding the steep jump for properties of an ‘E’ to a ‘C’ or higher rating given the amount of properties this will effect, and the ability of Landlords to invest in home improvements, such as insulating walls and roof, upgrading boilers and heating systems and double or triple glazing. But the counter argument is that this will increase the tenant’s comfort in their homes, lower the ever-rising energy bills and lower the overall carbon footprint.
Further afield the new legislation would have a definite impact on the buy to let market. Currently the legislation states that an ‘E’ rating is acceptable, but once the law is changed the effect will definitely be felt in the mortgage sector as applications will need to prove that the property being purchased is of a ‘C’ rating. Also, properties for sale with a lower rating could possibly alienate the investor and buy to let sector of the market if major upgrades need to be done before they can present the property on the rental market.
All in all, there is no guarantee of when this new legislation will be signed off, but it is happening, and the rental sector need to be ready to make the necessary changes.
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