What are the Upcoming Changes to the EPC Rules for Landlords?

There are tighter rules on the way for landlords. These ones concern energy efficiency ratings. Here at Clarity Property Management, we’ve done our homework for you. Let Clarity’s Negotiator, Ted McKechnie, walk you through everything you need to know about Energy Performance Certificates.

And, how failure to comply could land you in some (outstandingly expensive) hot water.

Another day, and there’s yet more news of another upcoming legislation change for people who rent out their properties. We mention this often, but being an accountable, legally compliant landlord is no longer the relatively simple, straightforward path it used to be, if indeed it ever was.

Your responsibilities towards the safety and well-being of your tenants are, shall we say, in-depth. And, they’re set into legislation. The new stipulations don’t happen until 2025, but time has a habit of moving extremely fast. And, it’s always better to be prepared.

Here at Clarity Property Management, we know that achieving a healthy rental yield is one of your key goals as a landlord. Having taken the deep, dark dive into property investment (or even if you’ve engaged us simply to manage the rental of your 1-bedroom flat), you’ll want not only to cover your outgoings, but also to turn a profit.

You’re in business, after all.

The Legislation Changes, in a Nutshell

As of 2025, all rental properties will require an EPC rating of “C” or higher. These new regulations will apply firstly to new tenancies, then to all existing tenancies from 2028.

For your tenants, this could mean lower utility bills, which is good news. And of course, you’ll be contributing to a greener world through helping to save precious resources.

But There’s a “But”

It’s important to know that there are a few exceptions, which apply mainly to listed or protected properties – say where altering or improving them in order to reach the required level would unacceptably alter them.

For example, windows are key features best left alone.

Given that there are already strenuous local authority planning permission rules, it’s no surprise to learn that there’s an equally stretching list of “no, you can’ts” attached to period properties. If you rent out a Grade II listed house or flat in Brighton and Hove, of which there are several, and it’s why this is such an in-demand area – it’s worth getting in touch with us for advice.

Much of Brighton & Hove falls within conservation areas, so there are likely to be caveats, allowing for the fact that you will still need to do your utmost to make the property as energy efficient as possible.

What IS an EPC, and what are the current requirements?

An EPC, or Energy Performance Certificate has been required in rental properties in England and Wales since 2008, so no doubt you’ll already be aware of this. However, 2018 saw the introduction of the Minimum Energy Efficiency Standards rules, requiring all rented properties to have an EPC rating of “E” and above.

And since 2020, this legislation applies to both new and existing tenancies.

You must issue your tenants with a copy of their EPC. This is a requirement in law.

Your Certificate

An EPC offers in depth information about how energy efficient your property is, as well as its level of carbon dioxide emissions. To get the certificate, your Domestic Energy Assessor carries out inspections both inside and outside the property. Then, you’ll receive your report with recommendations to help you achieve the rating you need.
For example, they may look at your:

• Boilers and heating systems (some are much better than others – generally, the more modern, the more efficient they are)
• Roofs, walls and insulation
• Windows
• The size of the building
• The year it was built
• Lighting and fireplaces

It’s a pretty thorough review.
Your report may suggest greener energy sources, such as solar panels, wood-fuelled heaters, and the installation of lower-energy usage light bulbs.
The certificate will last for 10 years.

Reasons Behind the New Legislation

Many consider the government’s drive towards net zero by 2050 as ambitious. Making homes much more energy efficient and reducing carbon emissions is high on their agenda. As a landlord, they’ve got you in their sights.

What “C” Means and How to Prepare for the 2025 EPC Regulations

As may be obvious, a “C” rating pushes everything up two notches. So, it’s going to be much more difficult to reach than an “E”.

Your energy Things to Do list is likely to include the installation of a smart meter, as well as wall, loft and floor insulation. Also, perhaps a secondary source of heating and double glazing. It’s hard to be definitive. Why? Because every situation is different. The properties throughout Brighton and Hove are as distinct as the people who live here!

OK, something to be aware of, and it involves money.

At the moment, the maximum investment you have to make in energy performance for your property is £3,500. The higher rating flexes up to an uncomfortable £10,000. To reach “C”, the government’s on-average estimate is about £4,700.

The better news is that you can apply for a Green Homes Grant, which will fund at least two thirds of the cost of hiring tradespeople to carry out the work – up to a limit of £5,000.

How to Prepare

Book your energy assessment as soon as you can. Yes, the deadline is three years away, but as with everything relating to your rental property business, being prepared helps you to be a better landlord. Should the report reveal that a degree of work needs doing, there could be a delay in getting started, as everyone will act at once.
The inspection itself won’t take along, about 40 minutes or so.
And, these two points are key:

1. If you don’t have a valid EPC, or if it’s not valid, the local authority has the right to fine you up to £5,000.

2. Sharp intake of breath: when the regulations are updated in 2025, the penalty for NOT having a valid EPC of “C” and above will be raised to £30,000.

Yes, it’s an astronomically high fine. And yes, we sympathise.

Our View

Here at Clarity, we’re aware of changes in the rules and regulations of being a landlord. You want to do your best for the people who live in your property, and we can help you do that. Our expertise can help save you time, hassle and stress, and whilst we can’t mitigate this new legislation, we can advise you on your next best steps.

On the plus side, your tenants are going to LOVE you. Bills are, not to put too fine a point on it, massively on the up, so keeping the heat IN rather than letting it out through the (draughty) window is a big plus.

And a massive, great big tick.

This is planning for the longer term. Likewise, it’s part of our greener new world order – taking care of ourselves, and our planet.