There have been recent reports stating that all newly rented properties in the UK will be required to have an EPC rating in band C or above by 2025. These reports are causing huge concerns among landlords, who are worried about the cost implications of improving older properties to a C by this deadline.
The government is currently discussing proposals to introduce new minimum energy standards on rental properties. However, these rules do not form part of the Minimum Energy Performance of Buildings (No. 2) Bill currently going through Parliament.
In this article, we will discuss the EPC 2025 objectives and tell you everything you need to know about the new proposals.
What are the current Minimum Energy Efficiency Standards?
The Minimum Energy Efficiency Standards (MEES) came into force in England and Wales on 1 April 2018 and apply to landlords of privately rented domestic and non-domestic properties.
Under MEES, landlords must ensure that their properties receive an Energy Performance Certificate (EPC) rating of at least an E before they can start a new tenancy with new or existing tenants. If the property is rated as an F or a G, then landlords are legally required to complete energy-saving renovations to improve the rating to an E or above.
The government is providing funding for energy-efficient property upgrades, although landlords are expected to contribute up to £3,500 towards the renovations. These costs should be recovered quickly through the energy-saving and cost-saving benefits.
From 1 April 2020, landlords that own domestic properties have been unable to continue renting their property if they have not carried out the required renovations. Failure to comply with the rules can result in a fine of up to £150,000.
Why were these rules introduced?
The MEES were introduced to help decarbonise the ageing housing market and make UK homes less polluting. Many privately-rented properties were running in a less than environmentally-friendly way and landlords did not have much incentive to carry out green upgrades.
Requiring all eligible properties to meet a minimum level of energy efficiency has helped the rental market become more sustainable and affordable. Decarbonising existing properties will play an essential role in achieving net-zero by 2050 or sooner.
What new rules could come into effect and when?
The new Bill being discussed would require:
(a) all new tenancies to have an energy efficiency performance of at least EPC Band C from 31 December 2025; and
(b) all existing tenancies to be in EPC Band C or above from 31 December 20 2028 where practical, cost-effective and affordable as defined under section 1(4).
There is still uncertainty as to what the final rules will be, or whether the new standards will even come into force. However, the changes are likely given the government’s ambitious environmental targets.
We recommend that landlords start preparing for these new standards by identifying ways to make their properties more energy-efficient. It is a good idea to carry out upgrades when opportunities arise rather than waiting until the last minute. We will discuss some of the best ways to improve your EPC rating below.
What can landlords do to improve energy ratings?
Update your heating system
The majority of existing homes in the UK have gas boilers. These use a lot of energy to run which is both polluting and expensive. New heating systems are much more energy-efficient and replacing your boiler could reduce your carbon emissions significantly.
Install insulation in your roof
A quarter of heat is lost through the roof in an uninsulated home according to the Energy Saving Trust. Installing extra insulation in your loft is a relatively simple upgrade that could save you huge amounts in heating bills. You should also consider adding insulating materials to your wall cavities and flooring to make your home more energy-efficient.
Upgrading your household appliances is another easy way to make your home more energy-efficient. The cost of the new appliance should pay for itself over time through the energy-saving benefits.
The current rules state that any rental property in England and Wales must have an EPC rating on at least an E. The new bill currently being discussed will require rental properties to meet a compulsory EPC rating of band C on new tenancies by December 2025, and on all rented properties by December 2028.
The UK government has set ambitious targets to achieve net-zero by 2050 and new minimum energy standards will likely come into effect. Landlords should take these rules seriously and prepare by taking steps to make their properties more energy-efficient.