There are plans to change the energy performance (EPC) minimum ratings of privately rented homes in England and Wales from band E, to EPC band C, which would apply for all new tenancies from 2025 and all existing tenancies from 2028.

The open consultation exercise closes 11:45pm on 30 December 2020

The proposed changes from the Department for Business, Energy & Industrial Strategy have raised concerns within the industry, given the significant number of properties involved and the impact of Cocid-19.

Originally introduced in 2007 as part of the now-defunct “Home Information Pack” for private residential homes, the Energy Performance Certificate (EPC) is intended to inform potential buyers and tenants about the energy efficiency level of a home, and therefore typical energy costs. It is also intended to highlight those aspects of a home affecting energy efficiency which may need to be improved.

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Currently for anyone selling or renting a home in England, Wales and Northern Ireland, an EPC is compulsory. There are different rules for properties being sold or rented in Scotland.

In 2012, as part of the government’s Green Deal scheme (since abolished), EPCs were simplified and updated to improve their effectiveness, but still there has been criticism as to the reliability and variability of EPC scores.

Since 1 April 2018, landlords have not been permitted to let a residential property with an EPC rating below an E on a new tenancy (including an extension or renewal).

An EPC is valid for 10 years and the score achieved by a property is from A to F. It is based on a survey of the property which is meant to accurately determine its energy efficiency rating. The surveys are carried out by what is known as a Domestic Energy Assessor (DEA) at a typical cost of around £45 to £100., under the Energy Performance of Buildings Regulations 2012.

Tenancies in existence before 1 April 2018 with an EPC rating of F or G were given an extra two years to make appropriate improvements. From 1 April 2020, these properties will fall under the scope of the 2015 Regulations.

Given that many properties in the private rented sector are of older type construction, many with solid, as opposed to cavity walls, bringing them up to level C will have significant cost implications for landlords.

This in turn is even more significant given that many landlords are suffering financially given rent payment problems brought about by the Coronavirus pandemic, hence the importance of landlords contributing their views in this residential consultation process.

The government states that the consultation seeks views on the government’s proposal to amend the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 to “significantly improve the energy performance of private rented sector homes in the 2020s, in order to,”:

• Deliver significant emission reductions, which will contribute to Carbon Budgets 4 and 5 and support a decarbonisation pathway consistent with our Net Zero 2050 target;

• Decrease bills for low income and vulnerable tenants, in support of the government’s statutory fuel poverty target;

• Increase the quality, value and desirability of landlords’ assets;

• Reduce energy bills for tenants and ensure warmer homes;

• Support investment in high quality jobs and skills in the domestic retrofit supply chain across England and Wales;

• Provide greater energy security through lower energy demand on the grid and reduced fuel imports.

Open consultation – Improving the energy performance of privately rented homes

Respond online at the link above, or submit a response by emailing PRStrajectoryConsultation@beis.gov.uk.

6 COMMENTS

  1. The unintended (or possibly intended) result of the implementation of this is that lots of LLs with older properties will sell up. This will mean that nor only do these properties go into the private sector where no improvement is required, (and remain out of reach of most First time buyers) but also there will be a significant reduction in the number of properties available to rent, pushing the prices up & the choice down.

    EPCs already allow tenants to choose a property based on its EPC rating but funnily enough this doesn’t seem to be as important as location, size, style of property.

    The improvements necessary for an older property to reach a C are expensive &/or invasive. LLs will just not do them when there is no possible chance of a return on their money.

    • I don’t see why these properties would remain too expensive for FTBs.
      I’d expect the prices of the properties to fall, until buyers stepped in.
      I think it would be more about the size of the properties.

  2. This is clearly ridiculous with so many Victorian houses rented within London and it will definitely be brought out further down line can’t sell without these changes completed at some point. Should I sell up now?
    I clearly must get rid of tenant on sat that I’ve not been able to afford to do since unable to work and now can’t with current regulations regardless of being paid only 20% of agreed rent

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