Whether you are a landlord or a tenant, please check that your EPC is rated minimum “E”. Since April 2019, it is a legal requirement for all rented properties and failure to comply could lead to a fine up to £5,000 per property.
WHAT IS AN EPC?
An EPC or Energy Performance Certificate is a document rating (from A to G) how much energy is needed and the level of CO2 emissions created when living in a property. The energy efficiency rating measures the overall efficiency of a home. The higher the rating (A), the more energy-efficient the home is and the lower the fuel bills are likely to be. The environmental impact rating measures a home’s impact on the environment in terms of carbon dioxide (CO2) emissions. The higher the rating, the less impact it has on the environment.
EPC’s are valid for 10 years and are a legal requirement for letting and selling a property in England and Wales. Not only does it inform the prospective tenants or buyers on the property’s general quality and the energy expenses to expect, it is also an essential document landlords need to give to tenants at the start of a tenancy in order to validate possible future eviction notices.
IF YOUR EPC RATING IS LOWER THAN E
Landlords should verify how recent is the property’s EPC certificate. If they have done some home improvements since the last certificate, such as fitting a new boiler, new radiators or improving insulation, they’ll need to get a new fresh certificate. They can contact one of their local Energy Assessors here: Find an energy assessor – GOV.UK
An EPC certificate costs between £50 and £100, depending on the property’s size.
If the new certificate’s rating is still an F or a G, the document will list recommendations to improve the home energy efficiency and landlords have to carry out these works if they plan to let the property in question or renew a tenancy. Please note that these recommendations must be combined together to achieve the estimated higher rating after works. A new EPC certificate will be required after the works.
Landlords can receive financial help from the Government through the Green Deal scheme, in place until March 2022 to fund up to two-thirds of the cost of energy-saving improvements. The majority of homeowners can expect a maximum of £5,000. Households on low-incomes can receive up to 100% of the costs with a maximum of £10,000.
There is a new self-funding element for residential landlords, which takes effect if landlords are unable to access third-party funding to improve any rental properties with F or G ratings. It is capped at £3,500 including VAT per property and covers both the purchase of material and installation. It means that landlords without funding must spend up to this amount sufficient to improve the property to a minimum E rating.
Another possibility is that landlords top-up third-party funding to total £3,500 maximum.
The landlord can choose to make any improvements that they wish, including those made in an EPC report, “so long as they are confident that the measure(s) will improve their sub-standard property to a minimum of EPC E”.
In case landlords are unable to improve their property band E within the £3,500 cap, then they should install all possible measures and register for an exemption on the basis that “all relevant improvements have been implemented and that the rating remains below E”.
Another scheme to help fund heating cost reduction improvements is the Energy Company Obligation, where energy companies finance the upgrade of insulation and heating systems under certain criteria.