The government proposes to require landlords to upgrade the energy efficiency of their properties to a minimum standard of C by 2028, as part of its ‘net zero’ target by 2050. The rules will force landlords to spend thousands of pounds within the next five years.
What is an EPC?
The Energy Performance Certificate (EPC) of a property is a legal requirement if you sell, lease or rent out property. The EPC is based on the amount of energy the property uses per square metre and the level of carbon emissions in tonnes each year.
EPC ratings range from A (extremely efficient) to G (extremely inefficient). The minimum rating since 2021 for rented property has been E – anything lower has led to landlords being fined up to £5,000. This fine may in future be increased to £30,000.
If your home has an EPC, you can find out the rating on the government portal. The Certificate expires after ten years, after which a new assessment needs to be made if the property changes hands.
How can I improve the EPC?
Lots of measures contribute to improving the EPC although the costs vary and some are more worthwhile than others. For instance, improving attic insulation costs a few hundred pounds and can significantly improve the efficiency of the heating system, saving money in the long run. More expensive measures might including replacing the heating with a heat pump or installing solar panels, both of which will cost several thousand.
The EPC will suggest the improvements that can be made to the property.
If the property does not have modern double glazing, loft insulation or an up to date boiler, this might be the place to start. Similarly, simply replacing light bulbs with LED can tip the property into the next rating band.
The roof is where a quarter of heat is lost in an uninsulated home. Loft insulation alone can save an average £335 in energy bills in the typical semi-detached property and the investment should pay for itself many times over.
Cavity wall insulation can also provide big savings but you should always ask a Chartered Surveyor for an opinion on whether this is suitable for your property as it can cause damp issues and is not suitable for every home.
Will net zero make gas boilers redundant?
The government is encouraging the take up of heat pumps by offering financial incentives in the form of a £5,000 grant. There is a target of 600,00 heat pumps a year by 2028. At the moment, installing a heat pump is not likely to increase an EPC to a C-rating and may even reduce the rating if it increases electricity usage. This is because the government currently incentivises the use of gas over electricity, although this may soon change.
The replacement of gas boilers will no longer be permitted ‘like for like’ from 2035, although there is no mandate for them to become illegal.
Experts advise that most home owners don’t yet need to change their heating system if they have a modern, efficient gas boiler.
As a landlord, hoping to improve the EPC of a rental property, the installation of expensive heat pumps or solar panels is not currently worth the outlay.