Good Landlording

This week, Suzanne Smith and Richard Jackson talk about a subject that causes a mixture of angst and even anger among landlords, and that’s EPCs, or Energy Performance Certificates.

EPCs are very important for landlords, as the government announced in September that they’ll be consulting on proposals for private and social rented houses in England to achieve EPC rating C by 2030.

They start with a recap on what EPCs are and the current minimum EPC for private landlords, before discussing problems with unreliability, and government plans to increase the minimum rating to a C and improve the reliability of EPCs.

Suzanne goes through what we know about the new Warm Homes Local Grants that will available for some private landlords from 2025, and they both end with some practical tips and ideas for improving the rating.

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The new consultation for private rented properties to have EPC C

The government announced in September that they’ll be consulting on proposals for private and social rented houses in England to achieve EPC rating C or the equivalent by 2030.

What is the average energy efficiency rating in the PRS?

According to the latest government figures, the average EPC rating for the private rented sector in England and Wales is D (65) for existing properties. (Rating C starts at 69).

However, the figure of 65 includes flats, which tend to have a higher EPC rating, as well as post-war properties.

What is an EPC?

“EPC” stands for energy performance certificate. It was originally introduced by the European Union, and was designed to make the energy efficiency of buildings more transparent and comparable between different properties.

It’s a certificate, which shows the rating of the property’s energy efficiency, ranging from the most efficient at an A to the least efficient at a G.

A qualified energy assessor creates an EPC by inputting information into government approved software about the building, its heating, lighting, ventilation, air conditioning

Consequently it’s important that the energy assessor inputs accurate information into the software.

How to find out what EPC a property has

It’s easy to look up the EPC rating of any property by using the Find an energy certificate checker.

This is very useful for landlords as they can look up the EPC ratings of other properties in the same street and see which assessors have done the ratings.

What rules do landlords need to comply with relating to EPCs

Currently, rental properties must have an EPC rating of either at least an E or for the landlord to have spent up to the cost cap on improvements, ie £3,500 (inc VAT) on energy efficiency improvements.

The landlord must have commissioned the EPC before listing a property, and must use “all reasonable efforts to obtain one within seven days”.

Landlords need to provide tenants with a copy of the full EPC with the assessor’s report before they sign the tenancy agreement. If they don’t do this, they may be unable to serve a Section 21 notice.

An EPC is valid for 10 years, and doesn’t need to be renewed until the property is listed for sale or rent after it expires. . And, of course, that’s soon gonna be phased out anyway. Yeah. And so an EPC is valid for ten years. And a question

How accurate are EPC ratings?

EPC ratings are notoriously variable and unreliable, and there’s much academic research which concludes the same. For instance, research by Leeds Beckett University (2019) found that “27% of EPCs in the open EPC record display at least one flag to suggest it is incorrect and estimate the true error rate of the EPC record to be between 365 and 62%”.

Energy assessors often make assumptions (for instance, about the amount of insulation in the loft) that prove to be incorrect.

It’s important to supervise energy assessors to make sure they make the correct assumptions, and do actually check the loft. If you’ve done any work on the property, for instance put in insulation in the cellar ceiling, go armed with records and photos to show the assessor.

Do EPCs help lower emissions?

Research for the Passivhaus Trust says that EPCs do not reduce “if you want to drive energy efficiency, and EPC ratings are not the answer […] Using the EPC rating to try and drive lower emissions is unlikely to work in practice.”

Warm Homes: Local Grants

The government announced the new Warm Homes: Local Grants in September 2024 for England. This will enable some private landlords to benefit from local authority grants for energy performance upgrades and cleaner heating from 2025.

To qualify for the grants, private landlords will need to meet the following requirements:

• The current EPC rating must be D to G.


• The household must meet one or more of the eligibility criteria: the property is in an IMD:ID postcode (Indices of Multiple Deprivation and Income Deciles), the household receives specific means-tested benefits or the household’s gross annual income is below £36,000 (every adult member of the household counts, other than those in full-time education.)

Landlords with eligible properties will be able to receive 100% funding for the first property, and a 50% cost contribution for upgrading any additional homes.

The cost cap structure has a cap of £15k per home for energy performance upgrades, and a cap of £15k per home for low carbon heating.

The landlord must declare they don’t intend to raise rents as a direct result of the installation of the energy efficiency upgrades and give consent to participate in a data gathering survey for the Department for Energy Security & Net Zero.

>> Useful resource: The new Warm Homes: Local Grant explained

Tips for improving your energy efficiency ratings

Increasing loft insulation is a very cost effective way of improving an EPC rating.

Other methods are energy efficient lightbulbs, thermostatic radiator values, a new efficient boiler, insulating the floor and walls, and installing double-glazing.

>> Related episode: What should landlords do about damp and mould?

Credits

Music: “Paradise Found” by Kevin MacLeod of Incompetech. Licensed under Creative Commons: Attribution 4.0 License.