In March of 2018, legislation known as the Energy Performance of Buildings Act (EPB) took effect, and with it came new requirements for how efficiently buildings use energy. New leases must comply with the regulations beginning in April 2018, while current leases must do so beginning in April 2020. In 2021, it was said that the minimum standards for energy efficiency that had to be met by law would be raised starting in 2025.
What is a Certificate of Energy Performance (EPC)?
An Energy Performance Certificate (EPC) is a document containing information on the energy efficiency of a rental property. Before a property can be rented out or put up for sale, the owner must get a certificate. You can take help from a property management company.
An energy assessment survey must be conducted on the rental property in order to obtain an EPC. Your domestic energy assessor will look at both the inside and outside of the building to figure out how energy efficient it is now and what changes could be made to make it more energy efficient.
Your home must undergo an energy assessment survey before obtaining an EPC. Your Domestic Energy Assessor will look at how energy-efficient your building is and how much more efficient it can be by making changes.
When your assessor arrives, they will consider the following:
Heating systems and boilers
Renewable energy sources (solar panels or wind turbines)
Lighting in the home
When the property was constructed
After a thorough evaluation, your assessor will write up your EPC and give it a grade of “A,” “B,” “C,” “D,” or “E” for its energy performance.
After completing the inspection, the assessor will create a 10-year-valid energy performance certificate. The certificate will tell you how much energy the property uses, what its current energy efficiency EPC rating is, and what improvements could be made.
It is essential to realize that an EPC and a home energy report are distinct. The owners may get a home energy study, which offers recommendations on how to make the rental property more energy efficient.
By law, a home must have an EPC before it can be sold or rented out.
Why must landlords obtain an EPC?
The Energy Performance Certificate (EPC) is essential because it helps prospective tenants or buyers understand the energy efficiency of a home. The certificate will detail the current energy efficiency EPC rating as well as measures that could be taken to improve it.
If tenants and buyers know how energy efficient a property is, they can make an informed choice about whether or not it is a good place to live or buy.
Also, landlords are required by law to make sure that their properties meet certain minimum energy efficiency standards.
Your EPC is valid for 10 years following its issuance. If you get new tenants or sell your house, you must get a new one, unless the lease says that both parties can agree to extend the term.
If yours has expired, you do not need to obtain a new energy performance certificate. If you intend to rent or sell the home, you must obtain a fresh EPC.
What are the advantages of possessing an EPC?
Energy Performance Certificates are advantageous for a variety of reasons:
It can help you figure out how energy-efficient your rental property is and what changes you can make to get a higher EPC rating.
It might help prospective tenants or buyers understand your property’s operating costs.
It can prevent penalties for failing to satisfy minimal energy efficiency criteria.
If you are considering selling or renting your property, an EPC is a powerful marketing tool that can make it more appealing to prospective buyers or renters.
The property manager can help you comprehend these advantages.
What EPC preparations are required of landlords?
If you do not have an EPC, schedule your energy assessment immediately. The examination itself takes about 30 to 40 minutes, but the required changes could take weeks if your home does not meet E or above standards.
The landlord is responsible for reviewing their EPC report and ensuring that the property has the required EPC grade. Landlords may spend up to £3,500 on these energy efficiency upgrades, including any government cash or awards from local councils or energy suppliers.
If the cost of the changes you want to make is more than £3,500, you can use the PRS Exemptions Register to apply for a high-cost exemption.
What effects do these new EPC regulations have on landlords?
An understanding of EPC regulations is required for property management. Landlords need to review these EPC regulations carefully,
Landlords may be charged thousands of dollars if a property must be upgraded from an E to a C rating. Landlords will have to insulate their buildings or add other “fabric first” features that help keeps heat in and light in.
If you want to promote your house for rent after 2025, you must provide letting agents with up-to-date, compliant EPCs. If your property does not have a grade of C or higher, however, you will not be permitted to promote it.
By 2025, all rental homes will be required to have an EPC rating of C or higher. At first, only newly rented homes will have to follow the new rules. By 2028, all other rentals will have to follow the same rules.
Financial aid to cover the cost of the new EPC regulations
Some landlord associations and regulatory authorities are requesting funding to assist landlords with energy efficiency improvements. The Association of Residential Letting Agents (ARLA) thinks that many landlords may not be able to meet the new requirements.
The tax reforms have had an impact on landlords and their leasing agents, and some are unable to obtain support for tenants with arrears due to COVID-19. Because of this financial stress on landlords, there will be less rental housing for people who need it.
Now that the consultation is over and the adjustments to the minimum EPC rating have been confirmed, landlords can begin improving the EPC rating of rental homes. The government’s website has the most recent EPC recommendations.