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Important Changes to EPC Legislation 2018

published on 19/03/2018  

As from the 1st April 2018 there is to be a requirement for any properties rented out in the domestic private rented sector in England and Wales to have a minimum energy performance rating of E on an Energy Performance Certificate (EPC). These regulations will come into force for new tenancies and tenancy renewals, as well as all existing tenancies on 1st April 2020.

Every property for sale or to rent in the UK is required to have an EPC that details its energy performance. Landlords are legally required to commission an assessment of their rental property every 10 years – if it continues to be rented out beyond the 10-year mark.
The EPC shows the Energy Efficiency Rating of the property in bands A-G; A being the most energy efficient and G being the least. Currently, there is no minimum energy efficiency requirement. Any property with a rating of F or G will be deemed unfit for rental and appropriate measures will need to be taken to improve the energy rating to the minimum E rating.

How to improve your property energy rating
There are several improvements you can make to a property which will improve the energy efficient rating and many are quite simple to carry to out:
  • Replace an old boiler for a newer, more efficient model.
  • Install double glazed windows to reduce the amount of heat escaping through poorly fitted frames or basic single glazing.
  • Make sure any cavity walls are filled with insulation materials, such as foam or beads.
  • Ensure the loft insulation is at least 270mm deep to keep heat inside the property.
What will happen if the energy rating is below E?
Your local authority will be responsible for ensuring that your property has a minimum energy rating of E. If they discover that your property performs below this standard, they may issue a fine up to £5,000 and stop you from renting the property. It will be unlawful to let a property which breaches these requirements, unless there is an applicable exemption.

The exemptions to this legislative change are:
  • The improvement works will devalue the property by 5% or more
  • The landlord cannot get consent to carry out the works either from the tenant, mortgage lender or superior landlord
  • If the landlord cannot afford to carry out any improvement works
  • If the relevant improvement works have been carried out but the energy rating remains under a rating of E.

There is a lot to be said for improving the energy efficiency rating of a property and this is true for landlords and tenants. A real benefit to the tenant comes with the fact that moving from a G rating to an E rating can lower the average annual heating bills by more than £1,000. This is something that will please a tenant and may help them stay in the property for a longer period. This will also benefit the landlord, minimising void periods and ensuring that they have less work to do.

A landlord can also take comfort in knowing that their property is in better condition, it’s value should have improved and they will likely be able to raise rental fees with some justification.