Landlord Tips Regulation

E Is For Energy (Rating)

Written by Sarah Walker

Is your property ready for April’s new EPC standards?

You may not have taken much notice of the energy efficiency rating of your own home when you bought it and, if you’ve lived there for more than 10 years, you might not even have an Energy Performance Certificate (EPC).

But as a landlord, you not only need to have an EPC but should also know exactly what rating your buy to let’s been given.

Since October 2008, it’s been a legal requirement for every property to have an EPC before being marketed for rent. The certificate has to be made available to prospective tenants when they view and a copy given to each tenant on move in. And since 9th January 2013, it’s been a legal requirement for all rental advertising to clearly display the energy rating, so tenants can see which properties are likely to have lower heating bills.

A survey of more than 3,000 tenants, carried out by LSL Property Services in spring this year, revealed that 42% consider the ‘green credentials’ of a property important when they’re choosing a property to rent and that figure rises among the over-25s, who’ve got more experience of paying utility bills and having to manage living costs. So, the rating of your property could make the difference between a quick let and the property staying on the market a little longer – especially in areas where there’s a lot of competition.

Rather worryingly, a recent survey by E.ON found that a whopping 27% of landlords didn’t know their property’s energy rating! So if you’re one of those, look out your EPC now, because the government estimates that 1 in 10 rental properties will fail to meet the new minimum standards. If you don’t have an EPC or need a new assessment, you can search for a local energy assessor on the DCLG website.

New ‘Minimum Energy Efficiency Standards coming into force in April 2018

From 1st April next year, you won’t be able to let or renew the tenancy on a property with an EPC rating of F or G. For existing tenancies, the property must meet the standards by 1st April 2020.

If your buy to let doesn’t comply with the new regulations, your local authority can impose a civil penalty of up to £4,000 and, if the property still isn’t up to standard after 3 months, you can be fined up to 20% of the rateable value. On top of that, you stand to lose hundreds, if not thousands of pounds of rental income while the property is legally unlettable.

As the impact we have on the environment is being taken more and more seriously, it’s likely that regulations will tighten up further in the next few years. So, if you’re making upgrades or changes to your property now, it’s worth seeing if you can get the rating up to D or above, to give yourself the best chance of not having to carry out any further energy efficiency improvement works in the foreseeable future.

There are some circumstances where an exemption may apply, including:

  • if a sitting tenant refuses to give consent for improvement works to be carried out
  • if carrying out the necessary works would devalue the property by more than 5%.

In addition, the requirement to comply only extends to ‘appropriate, permissible and cost-effective’ improvements. You can find more information about this on the Residential Landlords Association website.

About the author

Sarah Walker

Sarah Walker is a freelance writer and editor with extensive knowledge of the property investment industry.

A former estate agent and television presenter, Sarah has spent over a decade writing for industry publications and leading UK property companies, producing a wide range of marketing and PR content, including consumer guides, newsletters, website copy, articles and reports.

She has ghostwritten a number of property investment books, edited several others on property, business and branding, and continues to work with entrepreneurs to produce literature that supports their business enterprises. Sarah has been both a landlord and a tenant herself and has invested in the UK and overseas.

Away from her laptop, she’s a keen photographer and loves exploring the Scottish Highlands. Skiing is her sporting passion and she’s an enthusiastic member of her local amateur dramatic society.

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