In 2018, EPC requirements changed for landlords through the introduction of a minimum energy rating of ‘E’ or above for new tenancies. Now, this rule applies to all tenancies, not just new ones.
In 2021, changes to the Minimum Energy Efficiency Standards were also announced that will affect landlords and rentals from 2025.
In this article, we recap the changes that happened in 2020, as well as everything you need to know about the latest updates for EPCs, what your legal responsibilities are and what happens if your property doesn’t have an EPC.
- What are the current EPC requirements?
- How are EPC requirements changing?
- What is an EPC?
- How long does an EPC last for?
- When do I need to renew my EPC?
- How can landlords prepare for new EPC requirements?
- Which properties are exempt from EPCs?
- Are tenants entitled to a copy of the EPC?
- What happens if I don’t have an EPC?
- What other legal changes can landlords expect from 2020?
- Are there more changes to come for EPCs?
What are the current EPC requirements?
Since October 2008, rental properties in England and Wales have required an Energy Performance Certificate (EPC).
On April 1st 2018, the Minimum Energy Efficiency Standards (MEES) came into force. This required all properties being let or sold in England and Wales to have a minimum EPC rating of ‘E’ or above.
How have EPC requirements changed?
From 1st April 2020, the Minimum Energy Efficiency Standards apply to all existing tenancies – not just new ones or renewals.
If your property doesn’t have a valid EPC rating of ‘E’ or above by this date, it cannot be legally let.
What are the new EPC regulations for landlords in 2022?
After a consultation in December 2020, the government have announced changes to the Minimum Energy Efficiency Standards for England and Wales.
The government have proposed that all rental properties will need an EPC rating of ‘C’ or above by 2025. Similar to the previous changes, the new regulations will be introduced for new tenancies first, followed by all tenancies from 2028.
The regulation changes hope to make homes more energy-efficient and reduce carbon emissions as part of the government target to be net-zero by 2050.
The penalty for not having a valid EPC will also be raised from £5,000 to £30,000 from 2025.
What is an EPC?
An Energy Performance Certificate gives detailed information about your property’s energy efficiency and carbon dioxide emissions.
To receive an EPC, you must have an Energy Assessment Survey carried out at your property. Your Domestic Energy Assessor will perform internal and external inspections to determine how energy efficient your building is and what possible level of efficiency is achievable if improvements are made.
Some of the things your assessor will take a look at are:
- Roofs, walls and insulation
- Boilers and heating systems
- Renewable energy devices (solar panels or wind turbines)
- The building measurements
- The year the property was built
Once your assessor has performed a full inspection, they will put together your EPC and grade your property’s energy performance: ‘A’ being the most efficient and ‘G’ being the least.
Do I need my tenant’s permission before arranging an energy assessment?
Landlords and letting agents must give tenants at least 24 hours’ written notice before any property visits. As an energy performance assessment and EPC is a legal requirement, the majority of tenants will happily oblige, but some may want to be present when the assessor stops by.
The tenant must give their consent for any property visits unless it’s an emergency such as a fire, flood or gas leak.
How long does an EPC last?
Once your EPC has been issued, it is then valid for ten years. Once it runs out, you do not need to get a new one unless you are entering a new tenancy with new tenants or selling the property.
Your EPC will also come with a recommendation report containing advice and improvements that will make your property more energy-efficient. Your assessor’s suggestions may include:
- Installing cavity wall and loft insulation
- Draught-proofing windows and doors
- Insulating pipes and tanks
- Installing a condensing boiler
- Reducing water usage
- Considering energy efficient glazing
- Considering renewable energy technology such as a wood fuelled heater, solar panels or wind turbines
- Installing low-energy usage light bulbs
When do I need to renew my EPC?
If your Energy Performance Certificate expires, you are not automatically required to get a new one.
You will only need to get a new EPC if you intend to let to a new tenant, or wish to sell the property.
Once an EPC reaches the ten-year point and expires, there is currently no automatic requirement for a new one to be commissioned. A further EPC will only be required the next time a trigger point is reached, i.e. when the property is next sold or let to a new tenant.
How can landlords prepare for the current EPC requirements?
If you haven’t got an EPC yet, you’ll need to book your Energy Assessment as soon as you can. The inspection itself will only take around 30 to 40 minutes, but if your property doesn’t meet the EPC requirements of ‘E’ or above, the suggested improvements made by your assessor could take weeks to carry out.
Book your Energy Performance Certificate today with a qualified assessor.
As a landlord, you have a legal responsibility to read through recommendations in your EPC report and ensure your property has the legally required rating. Landlords may spend up to a maximum of £3,500 on these energy efficiency improvements, including any funding or grants given by the government, local authorities or energy companies.
If your suggested improvements exceed £3,500, you can apply for a high-cost exemption via the PRS Exemptions Register.
How can landlords prepare for the new 2025 EPC regulations?
Achieving an EPC rating of ‘C’ will be more difficult than an ‘E’, particularly for older properties. The government have recommended a “fabric first” approach, covering wall, loft and floor insulation. The installation of a smart meter is also recommended.
Energy performance investment is currently capped at £3,500 for landlords, but as the higher EPC rating will require a greater investment, the cap will be raised to £10,000. The government estimate that on average the improvement needed to reach an EPC rating of “C” will cost landlords around £4,700. Landlords are encouraged to apply for the Green Homes Grant, which will fund at least two-thirds of the cost of hiring tradespeople to upgrade the energy performance of their PRS properties up to a contribution of £5,000.
Which properties are exempt from EPC requirements?
Exemptions also apply to:
- Temporary buildings (to be used for two years or less)
- Places of worship
- Some industrial site or workshops
- Detached buildings with a floor space of 50 metres or less
- Buildings that are due to be demolished
Are tenants entitled to a copy of the EPC?
Yes, they are. All tenants must be provided with a copy of the property’s energy performance certificate upon move-in.
If you are a tenant and are wondering what your rental property’s EPC rating is, you can find it via the government Energy Performance of Buildings Register. Simply type in your postcode, click your address, and all the energy performance information will be available to you.
What happens if I don’t have an EPC?
Your property cannot be legally let if it doesn’t have a valid Energy Performance Certificate. If you are found to have no EPC, you may be fined up to £5,000 by your local authorities.
When the regulations are updated in 2025, the penalty for not having a valid EPC of ‘C’ or above will be raised to £30,000.
You must provide your tenant with a copy of the EPC at the beginning of the tenancy or – if you have renewed the certificate whilst they’re in situ – at the earliest opportunity.
As a landlord, you are also legally obligated to give your tenant a copy of the government’s How to Rent guide and your EICR and Gas Safety Certificate. If you don’t supply your tenant with these legal documents, you won’t be able to issue a Section 21 notice.
What are the EPC requirements for Scotland and Wales?
All rental properties in Scotland and Wales require an energy rating of ‘E’ or above to be let.
What other changes should landlords be aware of?
EPC requirements aren’t the only announcement for landlords in 2021. Mandatory electrical safety inspections came into force in April, Stamp Duty has been extended and eviction proceedings and notice periods are under temporary changes until October 2021.
Read more: 11 Changes Landlords Can Expect in 2021.
Are there more changes to come for EPCs?
At the moment, the government’s announcement regarding expected changes for 2025 is what landlords should be preparing for. Ensure you are meeting EPC requirements and keep an eye out for future updates and announcements in the rental sector.
Get your EPC sorted today.