CPS Homes

Landlords, don’t be misled on EPCs

A number of misleading articles have recently been published in the UK media, incorrectly stating that all newly-rented properties in England and Wales will be required to have an EPC rating of Band C or above from 2025.

This has not been confirmed and, as it stands, is only a Government proposal. The proposal forms part of the Minimum Energy Performance of Buildings (No. 2) Bill that is currently in its second reading in the House of Commons. You can read the bill and follow its progress through passage here.

It is not uncommon for bills to be amended – or even scrapped – during passage, so it is by no means a done deal.

What are the proposed changes?

The bill, which applies to properties in England and Wales, proposes that all new tenancies must have an energy efficiency performance of at least Band C from 31st December 2025, with all existing tenancies meeting at least Band C from 31st December 2028.

It’s proposed that a landlord will be exempt from the duty to bring his/her property up to EPC Band C if they meet the criteria for an affordability exemption. That affordability exemption has not yet been confirmed, but currently, if you spend £3,500 on improvements and still don’t meet the existing minimum Band E rating, you don’t have to spend any more trying; you can just register an exemption. It’s been suggested that this cap will be raised from £3,500 to £10,000 for privately-rented properties if/when the new proposals comes in.

As a landlord, should I do anything at this stage?

Given the Government’s public strategy to decarbonise all sectors of the UK economy in order to meet their net zero target by 2050, we do expect there to be changes to the current rules. But whether those changes go as far as a minimum rating of Band C, or whether they’re introduced as early as 2025, is not yet known.

So whilst we don’t know the full extent of the legislative changes, we’d always advise landlords to have half an eye on the energy efficient improvements they can make. Each EPC provides recommendations on what can be done to improve the overall rating, though it may be more beneficial to take advice from a builder who would actually do the improvements.

Is there any financial assistance available for energy efficiency upgrades?

Yes, there’s a mixture of schemes, loans and grants that landlords can take advantage of;

The Boiler Upgrade Scheme (England and Wales)
VAT relief on energy saving materials (England, Scotland and Wales)
A Green Deal loan (England, Scotland, and Wales)
Energy Company Obligation grants (England, Scotland, and Wales)
Empty Property Grants (Regional funding – check with your local authority)
Smart Export Guarantee (England, Scotland, and Wales)

 

18 August 2022

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