New EPC requirements may be ‘relaxed’. But don’t shelve your plans to upgrade, just yet.
We’ve heard a lot about poor insulation standards in the UK’s housing stock. It’s a widespread problem that needs to change if emissions targets are to be met. It’s also very relevant to households as they struggle to avoid the impact of high fuel costs.
Within the property rental sector, change can be effected by regulation. Back in 2018, the government passed legislation under which rental properties had to reach an EPC rating of Band E. The change caused a lot of unease at the time. Landlords owning properties that were difficult to improve faced considerable expense. There were some grant schemes, but these were complex. Many landlords either sold properties to avoid the issue or passed the cost of improvements onto tenants via increased rents.
Moving to Band C
While some landlords were happy to flout the rules, others have been busy planning how to prepare for the next stage of the changes. It had been proposed that in 2025, the minimum energy efficiency rating required for rental properties would be set at Band C.
While the aim of the measure is sound, the practicalities are concerning. Many properties in the UK, whether owner-occupied or tenanted, will never be able to achieve Band C standards. Those that can will need substantial investment in energy-saving measures, which could lead to further rent increases.
Even the government acknowledges that the new regs could prove expensive. Their estimates suggest costs could average £4,700 per property.
Is the change going ahead as planned?
It’s becoming increasingly obvious that some of the government’s plans for the property rental sector are having an adverse effect. With rising interest rates, demand for rental properties is increasing, but landlords, whose earnings potential is shrinking and whose rights are being eroded, are choosing to leave the sector. Is it asking too much to expect landlords to shoulder the burden of another big step up in energy efficiency in the current economic climate?
That might be the thinking behind Housing Minister Michael Gove’s suggestion that the timescale for the next band of EPC changes could be ‘relaxed.’ The comments, made in a Sunday newspaper interview, said that the government was ‘asking too much too quickly’ of landlords.
Yes, but what, how and when?
While landlords need a housing department that understands and responds to their issues, they also need clarity. We all know how quickly time flies and the original plans apply to new tenancies from 2025 (and existing ones by 2028). And, let’s face it, 2025 is very close when you think about the amount of work that may be required. Grant funding may take some time to be secured and It’s already hard to get hold of tradespeople or source building materials. Improvements take time, and often more time than estimated.
Perhaps the immediate priority is to double-check current standards are being met. If this has been neglected, tackle it as a priority. Then gain an understanding of what’s required to reach Band C and the funding available. Is the upgrade possible? Is it financially viable? Maybe your portfolio needs to be re-examined?
Improved energy performance depends on three key areas, heating, insulation and windows and doors. Let’s take a quick look at each of these.
Install energy-efficient heating and hot water systems
This can include upgrading to a more efficient boiler, installing energy-efficient radiators, or installing a heat pump. These measures can significantly reduce the amount of energy required to heat a property and improve its EPC rating.
Consider the walls, roof and floor of a property. The right insulation can retain heat more effectively. Even if insulation is in place, check it. The recommended thickness for loft insulation has increased and new insulating materials are producing better thermal performance.
Upgrade windows and doors
Double or triple-glazed windows and doors can make a big difference – and enhance the appearance of a property. Windows and doors are rated like domestic appliances. Look out for those with A or A+ ratings.
Keep your eyes open
Housing supply, the cost of energy and emissions are all hot topics. Achieving a balance that satisfies everyone will be difficult. But even if plans to raise minimum EPC ratings for the rental sector are relaxed, they’re unlikely to be scrapped. The savvy landlord will know what changes are required and how to get any necessary changes completed before the somewhat undecided deadline.