The EPC argument continues, but what does it mean for you? The Bill (Minimum Energy Performance of Buildings Bill) which is still going through parliament means that Landlords will need to increase the minimum energy rating for rental properties to C for new tenancies starting 2025. For those tenancies that are already in place this minimum needs to be in place by 2028.
Current legislation in England and Wales requires buy to let properties to have an EPC rating of ‘E’ or above and you must have an EPC to rent a property. However, to meet the UKs emission targets for 2050 something must change as housing stock accounts for 15% of the UK’s total carbon emissions.
The legislation also includes owner occupied homes. This is with the aim that homeowner occupied properties will need to have an EPC rating of C or below by 2035. Given the age of properties in the UK this is going to be a very tall ask.
In information put together by Statista, that can be found HERE, most of the UK housing stock was built before 1981 – hardly the most energy efficient times! We know this as 58% of the properties we manage are D or E rated, which is typical for the market. Lots to do!
Is anyone else doing it?
There is a will to improve things as they stand without the legislation being in place. Direct Line recently surveyed their landlord clients and found that 83% of buy to let investors have made changes to their properties to make them more energy efficient. 73% say they understand this is becoming more important to tenants. In many cases, landlords are often going above and beyond to improve their property, aware that an improvement to the EPC rating is in the interest of both parties. I know Shelter and Generation Rent would totally disagree with me, but most Landlords that we work with realise providing an energy efficient home makes the property more attractive to prospective tenants.
C for confusion?
The problem we have found, is that some Landlords do not understand what is required to achieve the C rating. Some of the advice such as ‘install air source or ground source heat pumps’ will not suit certain types of houses. Clusters are a great example. The cap for improvements looks like it will be set at £10,000; above the cap we believe exemptions will be in place as they are now.
The best advice is if you are looking to extend your portfolio make sure that the new property has an EPC rating of C or above. If it’s lower, make sure you’re clear on what can be done to improve things. Your EPC document should give suggestions. In some cases getting a new EPC can be helpful as the calculations have changed with time. It is better to know exactly what you’re dealing with!
So what should you look to improve?
Back in August we talked about how energy Performance ratings could be improved as these elements really do make a difference:
Fit new loft insulation so that it measures at least 270mm in depth. Look into grants and funding opportunities to see if your property qualifies. Ensure that any cavity walls are also insulated.
There are plenty of ways to improve lighting efficiency but switching from halogen to more energy efficient LED lighting will have a big impact for relatively little cost.
Replacing single-glazed windows with double-glazed units will have the dual effect of sprucing up your property and giving its energy efficiency rating a boost.
Draft-proof doors and windows
Look around windows, doors, loft hatches and floorboards to identify draughty areas. Then you can address the best way to prevent the draught, be it excluders, fillers, curtains etc. The Energy Savings Trust estimates that the materials for draught-proofing an entire property could cost between £85.00 – £275.00 if you want to do it yourself. However, hiring a professional could cost considerably more.
If you’re able to invest a little more, then consider replacing an old boiler with a new condensing one. As well as hugely increasing your EPC score, this could reduce running costs by hundreds of pounds each year, making the property much more attractive for prospective tenants. If you want to boost your EPC score even further, then why not look at introducing updated heating controls too, such as boiler programmers, room thermostats and individual Thermostatic Radiator Valves (TRVs).
If your property allows, it is worth looking at a heat pump. These can make a huge difference and, in certain situations, generate an ongoing renewable heat incentive payment.