As you may be aware, regulations are changing in 2025 which means landlords have to stay ahead of the curve and make sure their properties comply with new laws. Read more in this article.
What is an EPC?
When looking to buy, rent, or sell a home, it’s critical to understand its energy efficiency rating. Whether you’re buying a buy to let, residential property or a HMO.
An Energy Performance Certificate (EPC) is a legal document that provides a rating of a property’s energy efficiency on an A-G scale in relation to the running costs of the property.
The certificate considers both the property’s potential energy performance and its services such as heating, lighting, and hot water.
What is an EPC Rating?
An EPC rating will include additional extensive information such as a breakdown of the property’s energy performance, environmental effect, recommendations for changes, expected energy usage, and possible savings.
It is crucial to remember, however, that the energy efficiency rating is based on “standard occupancy” assumptions, which may differ from how the property’s occupants utilise the heating and lighting. Learn more about this here.
What are the changes to EPC coming in 2025?
If you are a landlord, you may be interested in learning about the most recent government rules that may apply to you.
All newly rented houses in England and Wales must reach a minimum EPC grade of “C” by 2025 in order to minimise the UK’s carbon footprint and increase energy efficiency.
Existing leases must also be compliant by 2028. These requirements apply to both residential and commercial landlords, so be sure your rental properties are up to code.
The government is serious about enforcing these standards, and individuals who do not comply risk fines and other punishments. The restrictions are included in the Minimum Energy Performance of Buildings (No. 2 Bill) that is now being debated in Parliament.
The goal is for all landlords to make efforts to make their rented buildings as energy efficient as possible. Thus, if you’re a landlord, be sure you’re helping the environment while also avoiding any potential fines!
What impact will these new EPC regulations have on landlords?
If you are a landlord, you should be aware of the most recent EPC rules. Presently, nearly two-thirds of private rental dwellings have an EPC rating of “D” or worse.
That’s 77% of all CO2 emissions from households in England and Wales!
All newly rented homes must have an EPC for rental property rating of at least “C” by 2025, with existing leases required to conform by 2028. The impact on landlords is still to be determined, but we anticipate a big one.
It’s worth mentioning that the vast majority of landlords in the United Kingdom own either one or a few rental homes. This implies that many people may be ignorant of the shifting laws if they aren’t following home market news.
The expense of retrofitting a house to meet the new EPC criteria may be too expensive, yet it may be required to keep potential renters. After all, no one wants to rent a house that is inefficient in terms of energy use.
As a result, if you are a landlord, you should start thinking about how you may modify your buildings to meet the new EPC criteria.
While this may be an expensive venture, it may pay off in the long term by attracting more environmentally aware tenants and avoiding potential fines.
How to prepare for these changes as a landlord
If you are a landlord, you must begin planning for the new requirements that will be in effect by 2025 that have been announced as new EPC regulations in 2020. The first step in ensuring that your properties meet the regulatory level is to acquire an up-to-date EPC assessment from a competent assessor.
If your property has an energy efficiency rating of “D” or lower, it’s time to start thinking about methods to enhance it.
Upgrades include adding insulation in the walls and loft, double-glazing windows and doors, and replacing inefficient heating systems and lights with more effective options.
While some of the expenditures may appear to be prohibitively expensive, it is worth remembering that government subsidies can assist pay some of the costs.
Keep in mind that making improvements now will save you time and money later. Furthermore, if you do nothing, you may find yourself unable to rent out your house.
Thus, don’t put off preparation for these new requirements till the last minute. Use available resources to make your properties as energy-efficient as feasible.
What are the exemptions to EPC regulations?
You may be wondering how the new EPC rules will affect you as a landlord. The good news is that some exemptions are available, and you may apply for them if necessary.
It’s worth mentioning that an EPC exemptions list already exists, and you may go through it to see whether any of them apply to your house or use an EPC calculator to work this out.
Exemptions include scenarios in which you’ve previously made modifications to improve energy efficiency but your home still falls short of the minimum level.
Another exemption is possible if the cost of procuring and installing the least expensive suggested upgrade exceeds £3,500. For new landlords, a third exception is available, providing them six months to comply with the laws.
Third-party approval may also be necessary before energy-efficient solutions, such as solar panels, may be put on the property.
There is an exception possible if the installation of energy-efficient measures will lower the property’s market value by more than 5%, although the survey must be conducted by an independent surveyor from the Royal Institute of Chartered Surveyors (RICS).
Finally, where the property is not appropriate for internal or exterior wall insulation, an exception is offered.
Your home must currently satisfy the minimum EPC requirement of band “E” to be eligible for these exemptions. While it is uncertain how these exclusions will alter in tandem with the new EPC standards, many of them are expected to remain available.
What are the grants available to landlords to help with EPC regulations?
If you are a landlord, you should be aware that you may be eligible for an energy saving incentive under the ECO4 Programme.
This award can pay the entire cost of energy efficiency improvements, but you must fulfil specific criteria, such as owning a home with an EPC rating of “E” or below.
Other requirements include having renters who claim assistance, adhering to the council’s flexible energy standards, and living in a council-funded area.
Furthermore, the recently launched Eco+ Programme provides home improvements for people who live in households with an EPC rating of D or below in a lower council tax band region.
It is worth mentioning that financial assistance for landlords may become available closer to the implementation of the new EPC requirements.
But, don’t put off making these adjustments for too long, since it might have a detrimental influence on your money.
Is there any financial support for landlords?
Although landlord organisations (check some out here) and regulatory authorities are pressing for financial assistance to assist landlords in dealing with the anticipated changes, there is currently no official strategy in place to give this assistance.
Upgrading your property as a Landlord
Raising the EPC rating of your rental home necessitates increasing its energy efficiency. There are various viable options for doing so.
Before you start making improvements, examine whether a whole-house remodel would be more cost-effective. Taking on insulation, windows, and heating systems at the same time can provide better results and perhaps save money in the long term.
Switching to LED light bulbs might be a quick and straightforward way to improve your EPC rating. These bulbs are far more energy-efficient and environmentally beneficial than typical halogen or incandescent lights, and can make all the difference if your rating is on the borderline.
LEDs are a popular alternative for increasing energy efficiency since they provide both long-term savings on energy costs and an eco-friendly lighting solution. You may easily and cheaply improve your property’s EPC rating by replacing outdated lights with LEDs.
Installing new insulation is the best energy-efficiency upgrade to make if you want to get the most bang for your budget. It’s especially effective if your home’s present insulation is inadequate or non-existent.
The good news is that it will almost certainly be less expensive than other choices, making it an appealing option for landlords looking to enhance their EPC rating without breaking the bank.
The loft is a fantastic location to begin when it comes to insulation. Raising the insulation in the loft to at least 270mm thick will significantly reduce the amount of heat that escapes from your home.
An uninsulated home can lose up to 33% of its heat via the roof if it lacks loft insulation.
Get double glazed windows
If you want to enhance the energy efficiency of your home, don’t forget about your windows. Even if you have the most advanced heating and insulation systems, poor-quality windows can allow heat to escape.
While double glazing may not boost your EPC rating as much as loft or wall insulation, it may make a significant impact in minimising heat loss via windows.
Although double glazing is now common in most contemporary homes, older residences may still have single glazing, lowering the EPC rating.
Replacing single windows with double glazing may raise your EPC rating by up to ten points, and it’s not that expensive – roughly £2,000-£5,000 for a typical terraced house.
Upgrading a boiler
The heating system is a critical component of a home’s energy efficiency. If you have an inefficient old boiler, it might have a negative influence on your EPC rating.
But, switching to a new and more efficient model can make a substantial impact. Depending on the age of your present boiler, upgrading to a modern condensing type can boost your EPC rating by up to 40 points.
Given that the lowest criterion for an EPC rating is 39 points, this improvement can easily bring you up to the needed standard. It’s a £1,000 to £3,000 investment, but the potential for development makes it worthwhile.
Integrating clever thermostats and linked radiator controls with the new system can also help renters save money on heating expenses while improving the property’s rating.
Installing underfloor heating
If you want to enhance your EPC rating, adding underfloor heating might be a terrific alternative, as long as your home is well-insulated. Underfloor heating systems can use less energy by running at a lower temperature, making your house more energy efficient.
It can be used as a primary heating source or in combination with a central heating or radiator system to save electricity.
Water underfloor heating systems are often less expensive to operate in the long run, but they are more complex to install than electric systems. Underfloor heating installation costs vary based on criteria such as the kind of system, the overall area of the installation, and the age of your house.
You should anticipate to pay between £50 and £200 per square metre, so think about whether the benefits of underfloor heating are worth the cost for your home.
Get a smart metre
Installing a smart metre might be a good place to start if you want to improve the energy efficiency of your house.
Although it will not immediately increase your EPC rating, it will give useful insights into the energy usage of your house, allowing you to discover areas for improvement.
You can better comprehend the impact of any modifications you make to your house if you track your energy consumption.
This, in turn, may help you make more educated decisions about how to improve the energy efficiency of your property, perhaps resulting in a higher EPC rating.
Try out renewable energy
Utilise renewable energy sources like solar photovoltaic (PV) panels or ground-source heat pumps to boost your property’s EPC rating in the long run.
Although some choices may need a larger initial expenditure, government incentives such as the Green Deal can help you manage the expenses.
By investing in renewable energy, you will not only enhance the energy efficiency of your house, but you will also reduce your continuous energy usage, resulting in cheaper energy costs in the long term. It’s a no-lose situation!