Published: 03/10/2022Have you heard about the new EPC rating requirements from 2025? No? Ok, well, these changes are enormous within the rental industry, so if you are a landlord looking to rent out a property, or a series of properties, in the next few years, then it’s time to get knowledge savvy on this important subject. Grab a cuppa and let us update you with what you need to know…
From 2025 all new tenancies must have an energy rating of C or above. Currently, they only require an EPC minimum rating of E, so this amendment to the legislation is pretty dramatic and could mean significant changes are needed. However, the new regulations won’t apply to existing tenancies until 2028. This new rule is in line with the Government’s net zero emissions by 2050 targets, which prioritises the push for more energy-efficient homes. A survey conducted by Shawbrook Bank of 1,000 UK landlords highlighted that only 15% of landlords were aware of these changes. Unfortunately, putting off the work could leave landlords exposed to extended void periods when their property can’t be rented out while works are completed. This is something that we want to help our landlords avoid. It’s happening, so let’s get ourselves prepared.
What is an EPC rating?
EPC stands for ‘Energy Performance Certificate’ and is a report that informs you of the energy efficiency of a particular property and its environmental impact rating. Bit of a mouthful, but it’s actually pretty simple. For a home to be sold or rented in the UK, a property must have a valid EPC certificate which lasts for ten years. This is a legal requirement, so there is no dodging it or burying our heads in the sand. The certificate gives a potential buyer or tenant a good idea of how much they can expect to pay for their energy bills and is generally judged on how well insulated the property is. A good EPC can often be the difference between a sale going through or not…or a property being let. The EPC rating is graded on a scale from A down to G – the latter being less efficient. The average EPC rating for a home in the United Kingdom is currently a D, but with the changes to EPC rules, we will (hopefully) see this change in the near future. An EPC also offers suggestions for improvements that can be made to help improve the overall EPC score. These improvements are often ‘noted’ and put on the back burner until later, but it looks like that ‘later’ will now be sooner than planned.
Improving your EPC rating
There are many ways to improve an EPC rating, but unfortunately, apart from replacing your light bulbs, many can come at a considerable cost. But given the change in regulations, this is a cost that is, for many, unavoidable. To help improve your EPC rating, you could consider the following:
- Energy-saving light bulbs - one easy way to improve energy efficiency is to replace old halogen or incandescent light bulbs with light-emitting diodes (LEDs). These bulbs have become increasingly popular in recent years due to their efficiency and long-term savings on energy bills. They are a quick and inexpensive way to improve the EPC rating. Win-win. In a nutshell, changing your lightbulbs is the best place to start in making your property more energy efficient.
- Improve your loft and wall insulation – although not cheap, loft and wall insulation is likely to cost you less than many of the alternative improvements and can be a very effective way of improving a property’s energy rating. The price between cavity and solid wall insulation can be considerably different. Still, it is an option worth investigating if your EPC rating sits well below the minimum requirement for letting out your property.
- Install a more efficient boiler - An efficient boiler is one of the major contributing factors to a home’s energy efficiency. It could significantly impact your EPC score in contract to a less efficient one. Depending on the age of the existing boiler, switching to a newer condensing model is an option worth considering.
- Replace your windows and doors – upgrading your old windows to double, or even triple, glazing can dramatically reduce the heat lost from a property. Although it may not have as significant an impact on your EPC as wall and loft insulation, it can definitely help improve your overall rating. There is no denying that this upgrade is a significant financial commitment and not one that every homeowner is in a position to pay out for. But with the changes not coming into play until 2025, this is the time to consider your options and budget ahead for any extensive work required.
Benefits of improving energy efficiency
Last year Homeserve.com published a blog on the changes to EPC rating in 2020/21 and predicted that further, stricter changes would be made. They were correct. They also expected that many landlords would be concerned about the financial impact these changes would have on them…understandably so. During a time of financial crisis for many, these announcements have been a massive blow.
But when an unavoidable change is on its way, there is only one way to move forward: by focusing on the many positives we can draw from it…the whole silver lining approach. Ever the optimists, we are confident that even if you aren’t living in one of your properties, you can still benefit from keeping it as energy efficient as possible. And here’s how:
- An energy-efficient property can increase its value and desirability, which means you’re more likely to have it occupied (and not sitting empty) for longer periods.
- If you have energy efficiency measures in place, you’ll have lower maintenance bills. Over the winter months, the likelihood of mould, damp, condensation and freezing pipes is increased – all big hassles for landlords, but a better EPC rating can reduce that.
- Warmer homes and cheaper energy bills mean happier tenants. Because they’re not forking out on huge monthly bills, they have more disposable income. This also makes rent arrears less likely…every landlord's dream!
The moral of the story is that this is happening and we need to try and make the transition as easy and stress-free as possible. Easier said than done, we know. Over the next couple of years, landlords are encouraged to start planning early to spread the work and financial burden over a longer period.
So if you are reading this and this change will affect you, plan early. You will benefit more in the long run than those burying their head in the sand. We are happy to help, so let’s get one step ahead…