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Meet the EPC regulation

Published on Tuesday, 23 May 2023

In five years’ time all private rented properties will have to meet the C rating of the Energy Performance Certificate.


Originally, new rentals were required to have attained a C by 2025 and all others by 2028 but latest news indicates that the date will be pushed back to 2028 for all private lets.


When new legislation comes into force which requires property upgrades, inevitably the building trade comes under pressure, materials and labour are in high demand and prices rise. Thus, landlords who take the time to understand the new regulations and the investment required in their portfolio of properties to ensure they meet the C rating now, will not only be ahead of the game but could well save themselves both cost and headaches in the long term.


The maximum spend cap is set to be £10,000 for energy savings improvements, that is the amount the government expects landlords to pay out to upgrade each property or face a ban on renting the property. Acting sooner rather than later will also enable landlords to better spread the cost.


The UK has the oldest housing stock in Europe with almost 38% of its homes built before 1946 which means they are less energy efficient and upgrading can be expensive. According to UK residential property data company Outra, 4.5 million UK rental properties have an EPC D rating or below and 841,000 are in London.


The UK has a fairly poor record on the energy efficiency of its housing stock with some figures particularly startling. On average, homes in the UK lose heat three times faster than more energy efficient homes in Germany and the nation’s housing stock accounts for 16% of carbon emissions. However, the Energy Saving Trust puts the latter figure at 21%.


It is feared the onset of the new regulations could see many smaller landlords exiting the sector creating even more pressure on an already in-demand rental market. However, the real loser could well be the environment as landlords opt to buy up newer properties with typically better energy efficiency ratings for which they are also more likely to be able to rent at a premium meaning it could take some years before the older and less energy efficient housing stock in the UK is tackled.


Innovative solutions rather than punitive measures are few and far between, for example, mortgage lenders could incorporate a top-up on the loan purely to upgrade properties to become more energy efficient. The government also needs to ensure easy access to grants to encourage both homeowners and private landlords to improve the energy efficiency of their properties as for many, the cost is prohibitive.


There is plenty that landlords can be doing now and initially it should be to understand the EPC rating of their property and the improvements that can be made to boost it before making any investment in developments. The team at Bonsors can both undertake EPC ratings and provide advice on maximising budgets to make the necessary energy efficiency improvements. Bonsors’ property experts can also provide insights into potential tax incentives when undertaking energy efficiency improvements whilst grants may be available to both homeowners and property developers to undertake work.


About Bonsors

Bonsors are Chartered Surveyors and commercial property agents dealing with all aspects of commercial property in South West and West London, Surrey and Middlesex

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