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Post updated: September 24th, 2024
Landlords with rental properties with poor EPC ratings will need to improve their properties’ energy efficiency ratings to be allowed to let them out, under plans from the government.
In his keynote speech at Labour’s party conference, Energy Secretary Ed Milliband promised to take more than a million renters out of fuel poverty.
He said the government will consult by the end of the year on boosting the minimum energy efficiency rating for both private and social rented homes by 2030. Mr Milliband has previously stated these properties would need a minimum EPC rating of C by the deadline.
The Conservatives had originally set a deadline of 2028 to reach this target but former prime minister Rishi Sunak scrapped the plans earlier this year as part of his relaxation of net zero goals. And the Conservatives’ plan did not apply to social housing.
Under the current rules, if you’re a private landlord, to let out a rental property it must have an EPC rating of at least E. This applies to all existing tenancies, not just new ones or renewals.
If your property doesn’t have a valid EPC or Energy Performance Certificate rating of ‘E’ or above, it cannot be legally let, unless you have a valid exemption in place.
However, there is a cost cap in place: under the current rules, landlords will never be required to spend more than £3,500 on energy efficiency improvements.
Under the current rules, social rented homes are subject to no minimum energy efficiency standards.
The consultation is expected to include a cap on the amount landlords will be required to spend on upgrades. The Conservative government had set this figure at £10,000 under their plans and it’s expected the current Labour government will stick with a similar figure.
These plans would have a widespread impact on landlords if they go ahead; around 2.9 million privately rented homes are thought to have energy efficiency ratings below C.
However, there may be some support available from Labour’s £6 billion home insulation package, it has been reported.
Under the previous government’s plans, there were some exceptions to its proposed EPC changes including:
However, we’ll have to wait to see the details of what the Labour government is planning.
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There are lots of steps you can take to prepare for these proposed EPC changes:
Property improvements intended to boost the EPC rating are classed as ‘capital expenditure’ and not repairs and maintenance. This means they can’t be written off against profits to reduce your tax bill.
If you’re a landlord you must have at least 24 hours’ written notice of any property visits. As an EPC is a legal requirement, most tenants will happily oblige, but some may want to be present when the assessor visits.
Yes. As a tenant you are entitled to see the property’s EPC and you must be given a copy when you move in. However, you can check the property’s EPC yourself by checking the government’s EPC register in England and Wales. For properties in Scotland check the Scottish EPC register and similarly the Northern Ireland EPC register.
Once completed the EPC is valid for 10 years. However, when it expired you only need to get a new one if you’re setting up a new tenancy agreement or selling your property.
Rental properties in Scotland will need to have an EPC rating of C by the end of 2028. While in Wales, privately rented properties require an energy rating of ‘E’ or above to be let.
You may wish to hold off making any big decisions until these proposed EPC changes are definite. However if these EPC changes do go ahead it has the potential to cost some landlords a lot of money. Not only will some landlords face costly upgrades to their properties they may also require their tenants to move out for a period while the work is undertaken.
But while there’s no doubt that making these EPC changes could be expensive you could see an uplift in your property’s value if you make energy efficiency improvements. A study from Savills in 2022 found a third of buyers think EPC ratings are more important now than they were the year before.
Possibly. It seems likely that some landlords will sell up rather than pay to improve their properties.
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If your property has a high EPC rating (this varies but generally an EPC rating of A or B) you may get access to green mortgages. Some lenders will give you access to lower interest rates or cashback and bigger loans if your home meets a minimum energy-efficiency level.
While other lenders offer lower rates or cashback if you make energy-efficiency improvements or if you take out additional borrowing to pay for measures to improve your home’s energy efficiency. Find out more in our guide on Green mortgages
October 30, 2024 
