December 9, 2022

Increasing energy costs, EPC ratings and the impact on landlords in 2025

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

What are EPC’s?

EPC Certificate
EPC Certificate

Energy Performance Certificates (EPCs) can help both landlords and tenant understand the energy performance of their home, as well as identify areas for improvement.

An EPC gives a property an energy efficiency rating from A (the most efficient) to G (the least efficient). Landlords are required to get a new EPC every 10 years and it’s their responsibility to provide tenants with a valid EPC.

Having a good EPC rating can mean lower energy bills for tenants and a reduced home carbon footprint. This can make your property more attractive, affordable and comfortable for new and existing tenants.

What is energy efficiency?

Energy efficiency is the use of less energy to perform the same task or produce the same result. Energy-efficient homes and buildings use less energy to heat, cool, and run appliances and electronics

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.

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

How much will it cost for building improvements?

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.

Consequences of not meeting a minimum energy efficiency standard?

wooden jury hammer
Consequences of non compliance

Currently, buy-to-let landlords, who do not meet the minimum standards, can be served with a compliance notice and issued a fine of up to £5000 per property by the local authority.

However, from 2025 these fines are planned to increase to £30,000 per property making it imperative that landlords begin planning for the changes needed for their property. Existing tenancies will have until 31st December 2028 to achieve this new practical, affordable, and cost-effective target.

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

How to improve a property’s energy efficiency and energy saving ideas?

Most will depend on the property type, typical examples include:

Insulation, such as solid wall, cavity wall or loft insulation.

Heating systems, such as an energy efficient boiler.

Draught-proofing gaps and cracks.

Double glazed windows or energy efficient doors.

Renewable energy systems, such as solar panels or air source heat pumps or ground source heat pumps.

Upgrading to LED light bulbs.

Installing a smart meter.

Investing in retrofit assessments.

In conclusion?

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.

Landlords must act to ensure that their housing stock is up to the required standards. There are many new technologies developing and lots of energy saving ideas to help.

How can Summit Environmental help?

someone stood in a window on a tablet device

Reviewing your current EPC rating, understand what you have in place already and working out where the best investment is.

Reviewing your EPC and assessing the best renewable energy sources.

A Retrofit Assessment or Occupancy Assessment. A Condition assessment of the property.

Assisting on recommendations on your EPC are a list of improvements you can carry out to make your home more energy efficient.

Landlords must act to ensure that their housing stock is up to the required standards, we can help recommend works and approved contractors.

Thinking of Solar. You need a survey. This will confirm that your property is suitable for solar PV, and includes a detailed inspection of your roof, your electrics and a solar irradiance survey

Undertaking a new EPC. In both residential and commercial premises, we can undertake a new EPC to make sure your information is up to date and accurate.

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