As of 1st April 2018, it is now a legal requirement for residential landlords to ensure that their lets have a minimum Energy Performance Certificate (EPC) rating of E.
Further to this legislation change, as of April 1st 2020, this will also apply to all let residential properties, even on existing tenancy agreements.
An EPC 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.
In Scotland, the EPC must be displayed somewhere in the property, for example, in the meter cupboard or next to the boiler.
What does an EPC contain?
An EPC includes information about a property’s energy use and typical energy costs. It also contains recommendations about how to reduce energy use and save money.
The EPC gives the property an energy efficiency rating from A (most efficient) to G (least efficient) and is valid for ten years.
REMEMBER: You can be fined if you don’t get an EPC when you need one – The fixed penalty is £200 per dwelling.
How do I get an EPC?
You must find an accredited assessor to evaluate your property and produce the certificate.
Landlords with properties in England, Wales and Northern Ireland should look here: https://www.epcregister.com/searchAssessor.html
Those with properties in Scotland can find an assessor here: https://www.scottishepcregister.org.uk/assessorsearch
When is an EPC required?
EPCs are required as follows for these dwellings:
- Individual house/dwelling (e.g. a self-contained property with its own kitchen/bathroom facilities): One EPC for the dwelling
- Self-contained flats (e.g. each behind its own front door with its own kitchen/bathroom facilities): One EPC per flat
- Bedsits or room lets where there is a shared kitchen, toilet and/or bathroom (e.g. a property where each room has its own tenancy agreement): No EPC is required
- Shared flats/houses (e.g. a letting of a whole flat or house to students/young professionals etc. on a single tenancy agreement): One EPC for the whole house
- Mixed self-contained and non-self-contained accommodation: One EPC for each self-contained flat/unit, but no EPC for the remainder of the property
- A room in a hall of residence or hostel: No EPC is required
REMEMBER: Property advertisements must contain the EPC rating for the property and the SAP (Standard Assessment Procedure) rating – every new house must have an SAP rating, which reliably estimates the energy efficiency performance of a property – where an EPC is unavailable.
EPCs and Section 21 notices
As of 1st October 2015, landlords must provide an EPC to tenants before they can issue a Section 21 notice to evict them.
Tenants’ right to request energy efficiency improvements
As of 1st April 2016, tenants are able to request consent from their landlords to conduct energy efficiency improvements in their properties. The landlord cannot unreasonably refuse content.
However, it’s the responsibility of the tenant to ensure that the works are funded. The intention is that no upfront costs should fall on the landlord unless the landlord wishes to contribute.
All minimum energy efficiency standards in the UK
- From 1st April 2023, there will be a legal requirement for all let properties, both domestic and non-domestic, to meet this minimum standard, even if a tenancy agreement is already in place and the property is occupied
- From 2025, it is believed that the minimum requirement will be raised to D
Research from the UK Green Building Council has estimated that it will cost an average of £1,400 to raise a property from an F or G to a minimum E standard.
As of April 2019, landlords are required to pay up to £3,500 plus VAT for any necessary improvements to their property.
If these improvements will cost more than that, a landlord may be able to register for an exemption, instead of going ahead with work to bring it up to an E rating.
It is illegal to let a property that breaches this EPC requirement and upgrades must be made to bring up the rating unless there is an applicable exemption. This includes:
- If such work would devalue the property by 5% or more
- The recommended work has been carried out but the rating did not improve
- The mortgage lender will not approve the recommended upgrades
- If the building is listed and the upgrades would ‘unacceptably alter’ property’s character or appearance
If any landlord believes their let falls into one of these categories for exemption, they must register it on the PRS Exemptions Register.
Penalties for non-compliance
If you fail to meet these regulations, a fine of up to £4,000 could be imposed for any breaches.