In the UK all properties being let require a valid EPC (Energy Performance Certificate). EPC’s were first introduced by the UK government on 1st August 2007 in England and Wales. An EPC is basically a review of a property’s energy efficiency, primarily used by would be renters to quickly assess what the energy bills in their potential new property would amount to.
· estimated energy costs
· estimated carbon dioxide emissions,
· a list of recommendations and the impact they will have (known as “relevant energy efficiency improvements”)
· an assessment of what the property’s energy performance would be after any improvements are made.
· Windows
· Roofs, walls and insulation
· Boilers and heating systems
· Renewable energy devices such as solar panels
· Lighting
· Fireplaces
· Building dimensions and age
The scores range from A to G, with A being the best possible score and G the poorest.
Once issued, an EPC is valid for 10 years. At that point a new one will need to be requested if you are re-letting. In the meantime, a property owner planning to sell or rent their abode must obtain a new one if they do any remedial works that could affect its energy performance rating. Currently, there is no automatic requirement for a new EPC to be commissioned otherwise.
It is acknowledged that period properties will cost a lot more to bring up to standard. Currently, there is an affordability exemption for situations where changes would not be technically feasible, or the cost would exceed £20,000.
Since 1 April 2020, the minimum level “E” applies to all new, renewed or extended tenancies. However, the government is in the process of considering improving this minimum energy efficiency standard to a “C” rating by 2025. From 2025 the rating will need to be C or higher for any new lettings, and in 2028 it will also apply to any continuing tenancies. This is causing a lot of concern amongst landlords within the PRS (Private Rental Sector) who own older properties. As a landlord, you need to ensure that your property has an EPC that meets the latest regulations — the Minimum Energy Efficiency Standards.
The penalty for not having a valid EPC will be raised from £5,000 as it now stands, to £30,000 by 2025.
It has been estimated that in the near future it could cost about £10,000 to bring a property rated D up to C or above.
Unfortunately, improvements on a property intended to boost EPC rating are classed as capital expenditure and not repairs and maintenance, which means they cannot be written off against profits to reduce your tax bill.
As it stands, the likelihood is a shrinking of the PRS at a time when tenant demand is generally already outstripping supply. Many landlords are like to not want to find the extra thousands of pounds required to ride their EPC ratings, and just sell up instead. Time will tell.
· Modern condensing boiler
· renewable energy systems
· Double glazing
· loft insulation
· External wall insulation
· LED bulbs
Historically the EPC rating has been an essential must have for would be sellers and landlords, but in today’s climate with soaring energy costs it is more likely to be a tool used to compare properties. Once thing seems for sure and that’s the EPC is not going away anytime soon. The future of EPCs looks bright, with further developments and refinements likely in the coming years such as digital EPCs and the use of smart devices to measure energy performance.
https://www.gov.uk/find-energy-certificate
If you want help finding a qualified domestic energy assessor to conduct an EPC please get in touch and we’ll give you a recommendation. It will usually take around an hour and cost about £70 including VAT.
