Confusion reigns over the future of EPCs for rentals
Government plans to make rental properties greener by enforcing a minimum energy performance certificate (EPC) rating of C are causing widespread confusion throughout the industry, according to Leeds-based estate agent HOP.
This follows a recent energy performance consultation by the Government, which announced that it is considering making the C rating the minimum requirement for all new tenancies by 2025 and for all existing tenancies by 2028, in England and Wales.
The changes are now part of the Minimum Energy Performance of Buildings Bill, which is currently going through parliament.
As a result, HOP, which manages a portfolio of residential properties, aimed at both the professional and student markets in Leeds, is currently advising both new and existing landlords to seek expert advice and carefully consider a property’s EPC, when considering new investments.
Luke Gidney, managing director at HOP, says: “The EPC rating scheme has seven different bands, with G being the least energy efficient and A the most efficient. “Currently, rental properties in England and Wales need to have an EPC of at least E to be let, unless they are exempt, but the Government is considering increasing this to C, as part of its ambition to hit net zero carbon emissions.
“However, a surprising number of new and existing landlords are unaware that these changes are on the horizon. The EPC grading is something is certainly something they need check on before buying a property to let.”
Improving EPC ratings is also something to take advice on and Luke adds: “We are already advising a number of landlords on steps to improve their ratings and have decided to launch a comprehensive EPC Consultation Service to help navigate the proposed changes.
“Several members of our team are training to be official EPC assessors, so we can provide tailored and strategic advice on the best ways to improve a property’s energy performance.”
He adds that it’s also important to remember that the Minimum Energy Performance of Buildings Bill still has a long way to go before it becomes law, and it could still be thrown out.
“This is part of the reason why there is so much uncertainty and confusion around what to do. In many cases, turning a property into a C rated home could be as simple as improving the insulation or installing a more efficient boiler, but in some older properties it could require significant investment and work.
“It is therefore important that anyone investing in property now, as well as existing landlords, fully understand the EPC rating that is put in front of them and seek professional advice.”
While fears about the cost of having to upgrade a home’s energy performance abound, the investment will be worthwhile when it comes to tenant satisfaction and retention.
“Despite the possibility of the new legislation and the impact it may have on some properties, Leeds remains a very attractive location for investors,” says Luke.
“The city offers better value for money than many other parts of the UK with attractive yields.
“There’s also a good range of housing stock, with modern apartments and new builds often with a B or C rating and older houses and traditional Leeds terraces in the sought-after suburbs surrounding the city centre offering the best yields, though these are less energy efficient.”