Government proposes stricter EPC regulations for landlords from 2025
Minimum Energy Efficiency Standards (MEES) Regulations were introduced by the government in 2018.
These regulations were brought in to improve the quality of private rented buildings in England and Wales and to increase the energy efficiency of the worst performing houses and buildings.
By law, all domestic and commercial buildings available to buy or rent in the UK must have an Energy Performance Certificate. This allows the energy performance of buildings to be benchmarked, as well as providing cost-effective options for improvement. Currently, privately rented properties must achieve a minimum EPC rating of E.
The government’s aspiration is for as many homes as possible to meet a minimum EPC rating of C by 2035, where practical, affordable and cost effective.
Having committed to long term plans on the improvement of energy efficiency in privately rented homes, the government has recently consulted on raising the minimum EPC standard in all domestic rented properties to band C by 2028 and will publish a response in due course. It’s expected that this will be by the end of the year, with legislation to follow in 2022.
It’s being proposed that ratings should rise to C or above for all newly rented properties on the market from the start of 2025. Changes would be phased in, with existing tenancies given until 2028 to comply.
Once the regulations are updated in 2025, the penalty for not having a valid EPC could also rise from £5000 to £30,000.
An Energy Performance Certificate is needed whenever a property is built, sold or rented. All landlords must order an EPC for potential buyers or tenants before marketing their properties to sell or let. Each certificate lasts for 10 years.
The changes are being considered to ensure energy-efficient homes and to help in meeting the government’s net zero targets set out in the Build Back Greener strategy for decarbonising all sectors of the UK economy by 2050. Around 22% of the UK’s carbon emissions currently come from our homes.
According to data from the Ministry of Levelling Up, Housing and Communities, there are close to 13 million homes in England and Wales currently with an EPC rating of D or below.
Research by Rightmove estimates that almost 1.7 million homes in England and Wales with an EPC rating between D and G cannot be improved to reach a C rating. Regardless of cost, owners of listed properties, for example, could find it difficult to make significant changes to their historically protected building.
In the private rental sector, roughly two thirds of homes have an energy rating of D or below, meaning there would be around 3.2 million privately rented properties in England and Wales requiring work to meet government targets.
Making the jump from an E rating to a C may prove difficult and require a significant investment into the property. While most landlords will support improving the energy efficiency of their stock, they will also want a clear understanding of exactly what work is needed and the costs involved before upgrading.
Owners of Victorian terraces and older rural properties are likely to be hit hardest as these are typically less energy efficient, and measures such as modern boilers or double glazing may have little impact on EPC ratings. Insulation can be difficult and costly to fit if, for example, there are no cavity walls.
Improvements to achieve better EPC ratings are cumulative and include measures such as roof insulation, external or internal wall insulation, floor insulation, and double or triple glazing.
However, cheaper solutions also play a role, such as making use of low energy lighting throughout the home and increasing hot water cylinder insulation. Upgrading or installing heating controls can also be an effective way to control temperature and timings, and can be done without replacing the boiler.
Fossil fuel heating systems are likely to be phased out over time as part of the government’s plan to reach net zero carbon emissions by 2050. A ban on gas and oil boilers in new homes will come in from 2025 and it’s expected that a considerable number of existing homes will increasingly switch to forms of low carbon heating systems such as heat pumps.