As part of the drive towards Net Zero, the Government has launched a consultation on its plans to set a minimum EPC (Energy Performance Certificate) rating of C for privately rented homes by 2030. This starts a countdown to obligations on landlords that could cost the private rental sector as a whole nearly £20bn.
What Are EPCs?
Energy Performance Certificates rate the energy efficiency of a building, with the aim to reduce both energy wastage and excess carbon emissions. EPC ratings range from A, the most efficient, to G, the least efficient. A low rating (D or below) is not only likely to waste energy, but it will also be wasteful in terms of energy costs.
The ratings are determined by a points-based system, with a C rating defined as 69-80 points, while a D rating is 55-68. This means there could be a relatively small step up needed to achieve the necessary C. If the property has 68 points, for instance, it will count as a D, but only a slight improvement will take it up to C.
How Much Will Upgrading Cost?
The cost will obviously depend on how close your property is to meeting the requirements. If it already has a C rating, you won’t necessarily need to spend anything — although you may choose to improve the rating even further, in order to save money in the long run.
It’s been calculated that the average cost of upgrading to a C rating for a buy-to-let property would be around £8,000, rising to £9,000 in London. However, this can be set against potential long-term savings from the lower energy bills resulting from the changes.
It’s been calculated, for instance, that upgrading from D to C could result in a 29% reduction. If the current rating is G, this rises to 70%, representing an annual saving of £4,240 a year on an average property.
What Should Landlords Do Now?
Although you’ll theoretically have till 2030 to comply, assuming the plans go ahead in their present form, it’s a good idea to take action as soon as possible. Costs for the upgrades are likely to rise once everyone needs them done, so by getting them sorted now, you’ll be saving money as well as enjoying lower bills for longer. If you upgrade your certificate now, it will remain valid for ten years.
So how should you go about it? The important steps are:
- Find out your property’s current EPC rating
- Hire accredited assessors to point you to the most cost-effective upgrades
- Identify changes that offer most points for least cost
- Stay up to date with consultation and legislation
If you’re close to achieving C rating, you can make some very minor changes to boost your points score, such as insulating the hot-water cylinder, installing a cylinder thermostat and switching to low-energy lighting.
Unless your property already has a high EPC rating, it will involve an initial outlay, although you should be able to recoup the money over the coming years. Are late or unpaid rents impacting your ability to meet this initial expense? Give me a call and find out how I can help you get rents due to you into your bank account, allowing you to invest in your property’s future.
