CPS Homes

UPDATE: Minimum EPC standards in rented properties

Rhys Owen, Senior Property AdvisorYou may recall that, in August last year, we issued an update on the Government’s bid to raise minimum energy efficiency standards in rented properties.

Eight months on, the current position is entirely unchanged, meaning the Minimum Energy Performance of Buildings (No. 2) Bill that proposes to ensure new tenancies 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, is still in its second reading in the House of Commons. Read the Bill and follow its progress through passage.

It’s not uncommon for bills to be amended – or even scrapped – during passage, so it is by no means a done deal. There has been speculation in the media that, due to slow progress, the 2025 deadline will be scrapped. Instead, it’s been suggested that landlords will have until the end of 2028 to ensure properties meet Band C or above for new and existing tenancies. This is yet to be confirmed.

Exempt properties

In the existing legislation, a property is exempt from meeting the current Band E minimum if the work will cost more than £3.5k (inc VAT).

The proposed new Bill says this limit will rise to £10k. It’s unclear if anything you've already spent on bringing the property to at least an E will count towards this £10k, or if the spend resets.

There are other exemptions too:

  • The cost to do the work won't be repaid in energy bill savings over 7 years (there's a specific calculation for this).
  • You've already done everything you can according to the EPC's list of recommendations (i.e. it's blank) or a separate, independent report says so.
  • Cavity, external or internal wall insulation will potentially negatively affect fabric or structure.
  • You’ve been unable to gain the consent to do the work, e.g. planning, lender, freeholder.
  • The work required will devalue the value of the property by more than 5%.
  • Listed buildings / conservation areas (terms apply)
  • You've unexpectedly become the landlord.

All exemptions last 5 years (except the last one, which is 6 months), after which time you need to see if you can meet the minimum again. If you can't again, you can register a new exemption.

All exemptions are self-certified but require evidence, e.g. 3 different quotes if claiming high cost.

27 April 2023

The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.

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