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Be prepared - New EPC laws for landlords in just 18 months

Published on Tuesday, 04 October 2016

Landlords have just 18 months to ensure their properties comply with new minimum energy performance regulations due to be introduced on 1st April 2018.


Premises rented out in the private rented sector will need to have a minimum E rating on an Energy Performance Certificate (EPC) (Minimum energy efficiency standards) or risk falling foul of the law. Unless there is an applicable exemption, a civil penalty of up to £4,000 could be imposed for breaches.


The law, part of the Energy Act 2011, will apply to both the private and commercial property sectors.

From 1 April 2016, tenants have had the right to request consent to carry out energy efficiency improvements (Energy efficiency improvements) to their privately rented property from their landlord although it is the tenant’s responsibility to ensure funding. However, following the scrapping of the government’s Green Deal in June 2015 this has become more difficult to obtain although some eco grants are still available.


The 2018 regulations apply to new lets and renewals in England and Wales whilst all existing tenancies will need to comply by 1st April 2020.
Any premises with an F or G rating will be considered substandard and will not be able to be legally let until improvements are made. The legislation also affects the property market and can potentially make homes with these ratings impossible, or extremely difficult, to sell.


The legislation was introduced by the Department for Energy and Climate Change which became a part of the Department for Business, Energy & Industrial Strategy under Prime Minister Theresa May’s new government in July 2016.

Latest government data


Energy Performance Statistics released shows during Q1 2016, based on their fuel costs, 10% of domestic properties, which had EPCs lodged on the Domestic Register, received an energy efficiency rating of either A (the highest) or B. Almost two thirds received a C or D rating (64%) whilst just over a quarter (26%) were rated E, F or G (the lowest).


For the same period, 11% of non-domestic buildings were awarded an energy performance asset rating of A+, A or B and 58% were given a rating of either C or D, but almost a third (31%) were rated E, F or G.


In the 12-month period ending 31 March 2016, a total of 1,754,661 EPCs were lodged, 20% fewer than for the previous 12-month period, the vast majority (96%) were domestic.


If you’re a landlord of a domestic or commercial property, it’s a good idea to dig out your last EPC or have one undertaken to check your building’s rating. Even if your building is rated E, which will not be affected by the new rules, we would advise you to make some changes to enhance your energy efficiency score. Making a few alterations to improve the energy efficiency of your building will pay dividends in the long run and ensure your tenants, whether they are renting their home or a workplace, are happy. It will also mean there is less potential for your premises to receive a lower rating when it’s reassessed if improvements have not been made. Of course, there’s also the possibility that the minimum level could be raised to higher bands than the E set out in the initial regulations.


According to estate agents Knight Frank, around 20% of non-domestic properties could fall into the F or G categories which will have a dramatic impact on their marketability. Both valuations and rent reviews could be affected for those buildings which don’t meet the grade. Š


Acting now means you are more likely to be compliant before the regulations come into force and if you’re portfolio is up to scratch as far as energy efficiency ratings are concerned, then that’s another thing off your mind.


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