Landlord advice: New EPC Rating System

From 1st April 2018 it will be unlawful to let a property (new tenancy or a renewal) unless there is an EPC (Energy Performance Certification) in place with a rating of “E” or above. From 1st April 2020 this requirement will become retrospective and affect existing tenancies too. A property with and “F” or “G” rating beyond this time will be considered sub-standard.

Despite calls for a delay in the introduction of this legislation, the Government have, so far, stood firm.

Listed buildings do not currently require an EPC but it is unclear whether listed buildings or properties in a conservation area will be exempt from the minimum energy efficiency standards.

So what can be done?

Some of the simplest and most cost effective measures include:

  • Boilers – Replacing old boilers with new condensing and/or energy efficient boilers 

  • Insulation & draught proofing – roofs, lofts (inc hatches), walls, cylinders, pipe work, doors & windows

  • Replacement double or triple glazed windows or secondary double glazing

  • Storage heaters – replace old heaters with new fan assisted storage heaters

  • Thermostats – for boilers, hot water cylinders, room heaters and radiators

  • Water saving – Introduce water saving shower heads

  • Lighting – replace traditional bulbs with either LED’s or compact fluorescent lamps

More complex and costly improvements can also include:

  • Installation of additional services i.e. gas supply
  • Internal and external wall and floor insulation
  • Solar panels
  • Wind turbines

Local authorities will be responsible for ensuring compliance and can issue compliance notices and impose financial penalties unless one or more exemptions apply (exemptions must be registered).

Landlords may qualify for an exemption from attaining the minimum “E” rating where they can prove that one of the following applies:

• A qualified expert (RICS Surveyor) states that the measure will reduce the property value by 5% or more.

• A qualified expert states in writing that wall insulation will damage or have a negative impact on the structure of the property.

• The tenants withhold consent for the work

• It is not possible to secure third party consent either legally or contractually (i.e. planning permission)

Most importantly:

• That they have undertaken improvements that are cost effective but still remain below an “E” EPC rating (Cost effective measures are those improvements which do not require up front expenditure)

All exemptions must be registered with the PRS Exemptions Register (1st April 2017) and the local authorities will require evidence to support any exemption registered.

Exemptions will last for 5 years and must be reviewed to see if the exemption is still applicable or whether the work must be carried out.