Post-COVID, the landscape for landlords and lettings business owners faces further regulation.

The latest potential squeeze on landlords revolves around the Minimum Energy Efficiency Standards, which could take effect in 2025; these changes will impact the domestic rental property in England and Wales.

In practice, this will likely lead to tougher rules regarding your Energy Performance Certificates for each of your properties and the measurement of how efficient your properties are.

New legislation proposes that if you wish to advertise your property for rental from 2025 and onwards, you’ll be required to give lettings agents an updated and compliant EPC of a minimum of a C (currently an E).

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This can potentially cost landlords thousands.

Landlords will be expected to pay for either insulating their properties to retain heat or use other ‘fabric first’ features that can help to improve heating and lighting.

What’s the trigger for the added requirement? Well the government is focused on the ‘green recovery’.

The current government mandate is to ensure that homes are energy-efficient and reduce

carbon waste, helping towards the government’s net-zero target.

We listen to dozens of Landlords a week at our parent company AllServices4U.co.uk and one of the big ‘pain questions’ that we receive is, ‘how many more changes are there going to be, which will cut into my margins’?

It’s a tough question to answer, however, we can only answer by saying ‘we cant be 100% sure but likely yes’.

There is one thing that we are 100% sure of, however, and it is the fact that landlords must find solutions that protect themselves against the inevitable changes and do it in the most cost effective manner possible.

Our clients a kept on asking us for help, so we created the Total Asset Protection Plan

(landlord-protection.co.uk)

8 COMMENTS

  1. It seems a big secret exactly how EPC ratings are calculated, so LLs cannot figure out these things for themselves. I would very much like to know what are my options to improve efficiency (over the obvious ones) and exactly how much they affect the EPC rating. Instead i have to rely on “expects” to advise me, instead of actual facts.

  2. Hi Jim i am a energy assessor. EPC ratings are based largely on property age and size, heating form and insulation levels. Basically the older the property the more you need to insulate. ie walls floors and ceilings.Install condensing boilers if gas available or high heat retention storage heaters if not.To get the best overall rating you will need to fit solar water heating and pv solar panels on the roof. Hope this helps

  3. This green environmental EPC thing is complete B.S.
    If anyone was at all serious about the environment then surely they would target the 79% of properties that are owner occupied, not only the minority 21% that are rented.
    All costs that are incurred in the PRS to reach EPC standards will be passed on to the tenants one way or another, so it is the generally less well off renters that end up paying for the environment. The richer owner occupiers are the ones that should be paying for the environment & be forced to up their EPC ratings – not just rented properties.
    Or doesn’t the environment mind being polluted by the rich?

    Utter B.S.

  4. In my experience the EPC method of rating properties is not objective or consistent. I have two identical purpose built flats in the same block that have been rated differently, which suggests that the rating process is not standardised or fair. When I’ve challenged the ratings the ‘expert’ assessors have been unable to give a satisfactory explanation for the difference. I have been told that double glazing raises a property’s rating only to find that the improvement makes little difference to the efficiency score. In another property I installed a condensing boiler and made other improvements recommended to ächieve a B rating only for the property to be rated C ie below the rating predicted on the previous EPC. How can landlords work out the effect of improvements if the ‘experts’ responsible for determining the ratings don’t even know?

  5. We have had our EPC rating a few months ago, It was D. We have liaised with the person who created the EPC and they cannot suggest anything that will up the rating, other than spending literally thousands of pounds. Our rental house is stone built and our tenant is very happy, and states that the house is warm.
    Any suggestions what we can do to raise the EPC rating please? We rent in North Wales where the rent is very low £530 a month, for a house that has 2 bedrooms and a garage. Can we try and get together to fight this injustice, and many others? The so called people who should be fighting for us, obviously are in bed with the government and are far more concerned with tenants than the Landlords they should be representing. I for one would be glad to support such venture but I would need all the help I could get. No money should be involved.

  6. Like Beryl, I own a flat that I rent that is rated D, with all the elements, recommended: Condensing boiler, double glazing, roof insulation (this one doesn’t count ‘cos the flat is not on the top floor!), light bulbs etc.

    The only EPC recommendation that is not fulfilled for an upgrade to C is wall insulation. I can’t insulate outside as I don’t own the building and it is stone built in a conservation area anyway. Interior insulation? The effectiveness of this would be limited, as the only external walls are already covered with cupboards and kitchen units etc. Moreover it couldn’t be done without spoiling the architectural quality of the Victorian interior.

    I would like to continue to rent it out, but there is no consistency or clarity in the EPC system, but there is no guidance on what measures are appropriate for a period property. When my present tenant decides to leave, I will sell….reducing the stock of rentable accommodation by another unit.

  7. Comment on the Energy Performance Classification of Domestic Dwellings
    and possible future developments

    David Stuart Emmerson MA (Cantab) PhD (Leeds)
    Former professor of physics (retired)

    1: Introduction
    Current practice is that the Energy Performance (EP) of a domestic dwelling is assessed by a Qualified and Accredited energy inspector visiting the premises. His/her findings are input into an authorised computer program (the EPC algorithm) which calculates a single value for the EP on a numerical scale from 0 to 100 from the assessor’s observations. These numerical figures are banded into five colour-coded EPC ratings. The EPC algorithm has gradually been refined only slightly over the years since 2007.

    EP certificates, which have a 10-year validity, are publicly accessible at epcregister.com .

    2: Proposal for consultation
    It is proposed that the current mandatory requirement of an EPC rating of “E” for rented properties should be raised to “C”. If such is desirable, then one vital question arises:

    Is the present EPC algorithm fit for future purpose?

    3: The Position of the UK
    [This section omitted.]

    4. The nature of the EP of a domestic dwelling.
    The EP of a domestic dwelling is a measure of the intrinsic energy performance of the dwelling itself (of which ground-source heating and/or roof-mounted solar heating if present are an integral part). An EP must be independent of external factors such as location: two otherwise identical domestic dwellings in different locations must have identical EPC ratings. The existing algorithm does (should) achieve this. However:

    5. Major flaws in the present EPC algorithm
    However there are several flaws in the EPC methodology as it now is, some serious:

    5.1 The price of external energy purchased is factored in the EPC algorithm
    This makes a nonsense of the EPC being a measure of the intrinsic energy performance of the dwelling itself.

    We may note in passing that the Consumers’ Association (publishers of Which? magazine) has been testing appliances such as washing machines for decades. CA ratings are based on laboratory performance only; the purchase price of an appliance is never a factor in any CA assessment algorithm.

    5.1.1 Gas and electricity
    A gas combi-condenser boiler servicing wet radiators is awarded points generously by the software algorithm. This is only because gas is – at the moment, though this may change – about a third of the price per kWh of electricity. But this is irrelevant to the intrinsic energy efficiency of the dwelling. In fact combi-condenser boilers have an intrinsic efficiency of about 85% (15% of the energy is lost as hot air, seen clearly blowing out of the external vent on a crisp cold morning), whereas electric heaters have an intrinsic efficiency close to 100%.

    5.1.2 Electric storage radiators
    All-electric domestic dwellings without a gas alternative are commonplace; high-rise blocks of flats have no gas for safety reasons (recall Ronan Point), and many street and suburbs are located far from a gas main. The number of all-electric dwellings will inexorably increase as domestic gas is phased out (see section 3 above).

    Fashionable in the 1970s, some energy suppliers still offer Economy Seven type night-time tariffs (commonly from 11:30 pm to 6:30 am). The present EP algorithm awards points generously for night-time “modern” electric storage heaters (“modern” only in the sense of having inbuilt controllable fans, but otherwise hopeless). This is only because night-time kWh units are cheaper. The software algorithm also fails to take into account in such tariffs that the day-time kWh units are correspondingly more expensive in order to subsidise the cheaper night-time ones! So whilst washing machines can be run overnight (although this is strongly discouraged because of a spate of serious spontaneous fires in unattended washing machines), showering, cooking, and supplementary heating all fall within the expensive 17 hours each day (6:30am and 11:30pm).

    5.2 Electric taps
    In the last 5 years or so, the tankless electric tap has caught on in the UK. Working on the same principle as an electric shower, a tankless electric mixer tap heats only the water which passes through it. (Tinton Life is one of the better-known brands but there are many.) If a consumer prefers his/her existing style of tap (singles or mixer), then there is an under-sink tankless heater option.

    Because tankless electric taps heat only the actual water drawn, they are very energy efficient (and relatively inexpensive – about £40 per tap). So they should earn lots of EP points; yet they are unknown to the present EP algorithm!

    The installation of electric taps should, in my view, be made compulsory in every new-build all-electric domestic dwelling.

    6. Conclusion
    Yes, of course the Energy Performance requirement of ALL domestic properties should be increased. But increased to what? A EP Certificate has a validity of 10 years, so one issued today must still be meaningful in 2031.

    The country is currently struggling under a grotesquely unfit-for-purpose algorithm which, amongst other things:

    rewards gas boilers (on the way to being phased out),
    rewards so-called “modern” night-time electric storage heaters (i.e. 1970s with added fans), and
    is unknowing of tankless electric taps (the future).

    Professor David Stuart Emmerson MA, PhD
    Former professor of physics (retired)

    6th January 2021

    COMMENT TO ME AT: ekosen@outlook.com

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