The drive to improve the energy efficiency of properties in the UK looks likely to impact landlords in 2025, with the proposed EPC regulation that could require landlords to make potentially significant and expensive changes to their properties.

 

What are the current energy regulations?

All domestic and commercial properties for rent need to have an Energy Performance Certificate (EPC) confirming the property’s energy efficiency. Ratings range from “A” to the most efficient” to “G”.

Current regulations state that any property being let must have an EPC rating of “E” or above, with certificates valid for ten years. After ten years, landlords only need to renew their certificates when they relet their property to a new tenant.

 

What are the new EPC regulations proposing?

As part of the government’s objective to increase energy efficiency and achieve net-zero carbon targets, it’s driving for greater energy efficiency in homes. All newly rented properties will need an EPC of at least Band C from 31st December 2025.

Existing tenancies will have until 31st December 2028 to achieve this new practical, affordable, and cost-effective target. Fines for not having a valid EPC will also increase from £5000 to £30,000.

This new legislation is expected to come into effect some time in 2022.

 

How will this affect landlords?

With approximately two-thirds of homes in the private rental sector having an energy rating of D or below, it means around 3.2 million privately rented properties in England and Wales will require work to meet government targets.

When asked in a recent study, landlords with properties below a “C” rating believe it will cost an average of £10,400 per property to deliver the energy efficacy required. Still, if this action isn’t taken, landlords could find themselves with a property they cannot rent.

 

What can landlords do to prepare for the proposed change?

It’s difficult to see how any landlords, especially those with tenants already in place, will be able to quickly make the changes to their properties needed to meet the new C band efficiency rating. The work is likely to take time; you also need to work around your tenants to get any disruptive work done on the property and find the funding for such a level of investment.

All landlords need to start understanding the scale of the proposed changes by looking at their properties’ current EPC certificate, the recommendations made at the time, and understanding where the current areas of energy inefficiencies exist.

You can take many actions to improve a property’s energy efficiency and allow yourself time to plan the most effective and appropriate measures for your property that could help you save money.

With the potential for more regulations requiring further investment from landlords, now more than ever, it’s essential to protect your investment by looking after your property and ensuring that it’s well maintained. Regular property inspections and building good relations with your tenants keep your property an attractive proposition on the rental market, spread the cost of improving energy efficiency, and ensure you get a return on your investments.

 

No Letting Go

If you would like to discuss how our local support or national network at No Letting Go could help keep you regulation-compliant, streamline your costs and reduce your workload by becoming your inventory partner, then contact No Letting Go today.

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