Landlords have just over six months to make sure rentals are compliant with new legislation surrounding a property’s EPC rating, set to come into law on April 1st 2018.
The changes will impact the minimum Energy Performance Certificate (EPC) rating of a property, meaning that for any new tenancies or renewals after April 1st, the landlord must ensure the property has an energy efficiency rating of ‘E’ or above (39-54 SAP points). As of April 1st 2020, this law will be extended to apply to all existing tenancies as well.
What does new EPC rating legislation mean for landlords?
Essentially, the new laws surrounding EPCs have been designed to ensure homes are as efficient as they can be, and utilise all energy saving options possible.
An EPC rating looks at the overall energy performance of a property, taking into consideration use of energy, Co2 and fuel emissions, environmental impact and ways in which the property’s energy performance could be improved. The changes to the law mean that any properties with a current rating of F and G will need to make changes to things in the home that impact the above to improve the energy efficiency of the rental property. However, there are some exceptions to the rule. If it can be demonstrated that a landlord has undertaken all possible measure to improve the EPC rating and yet it remains below E, landlords won’t be penalised. If carrying out necessary improvements will devalue the property by more than five per cent or if a third-party (such as a tenant or freeholder) has denied permission for the changes to take place, landlords will be issued an exemption. These exemptions will last for up to five years and must be entered onto the PRS Exemptions Register.
These changes will impact a substantial number of properties, and there are penalties for non-compliance.
Not only can having a property with a poor EPC rating negatively impact its appeal to tenants, but failing to make necessary changes can result in a fine of up to £4,000. As such, landlords who haven’t already started reviewing the EPC certificates for rental properties should begin doing so, and should schedule in any necessary works that will improve the efficiency of the home. This could include the installation of insulation, a new boiler, double glazing, or a water-efficient shower head. Of course, tenants are also able to help in this regard; if a tenant requests permission to carry out any changes or improvements that will better the energy efficiency of a property, as of law that came into place in April of this year, landlords have to grant this request.
By working alongside tenants, landlords can take a positive measure to ensure all necessary changes are being made to improve a property’s energy efficiency.