EPC rules for rental properties

New Energy Performance Certificate (EPC) requirements are coming into force in England - but how will this affect landlords and your ability to rent your property? 

Here’s what you need to know about the upcoming changes and how you can prepare for what’s ahead.

What is an EPC and why does it matter?

Short for Energy Performance Certificate - an EPC offers homeowners, landlords and tenants a detailed picture of a building or property’s energy efficiency. 

Energy Efficiency Ratings are ranked on an A-G scale with the most efficient buildings rated A and the least efficient rated G. The rating system takes into account the energy performance of the property itself and the services within the property like the heating, lighting and more.

An EPC gives you an approximate idea of how expensive it will be to heat and light the property, as well as how much carbon dioxide it is likely to emit. It also makes recommendations on how you can increase the energy efficiency of your property.

An EPC is valid for 10 years from the date of issue - or until a newer EPC is produced.

If you’re a landlord letting your property or you’re looking to sell, it is a legal requirement to have an EPC. And new rules are coming in to regulate exactly how energy efficient your property needs to be.

What are the new EPC requirements?

The EPC requirements changed back in 2018 with the introduction of a minimum energy rating of ‘E’ or better for new tenancies - but now the regulations are changing again.

While the changes are currently still proposals and have not been confirmed by the government, there are some key changes you need to know about to help you get ahead.

Here are 4 of the most important proposals:

  1. Minimum EPC rating raised from E to C

There are plans to raise the minimum EPC rating from E to C for all tenancies, regardless of the age of the building. The proposed changes could be enforced as early as 1 April 2025 for new tenancies and 1 April 2028 for existing tenancies. 

New reports from The Telegraph suggest the deadline could be pushed back to 2028 for all properties - giving landlords an additional 3 years to work on raising their EPC rating.

  1. No more gas boilers

As part of the Government’s net-zero plan to cut carbon emissions by 2050, gas boilers are being phased out across new builds. The proposals suggest that as early as 2025, developers will not be permitted to install gas boilers into new homes - and from 2035 there will be restrictions on new natural gas boilers across all property types.

  1. Up to £30,000 fines for non-compliance

Under the proposed regulations, landlords could face fines of up to £30,000 if they fail to comply with the new EPC requirements - though the exact figures haven’t been confirmed by the government yet. This means there’s a huge financial incentive for landlords to increase their EPC rating asap.

  1. Fabric first policy

A ‘fabric first’ policy could be introduced to control how energy efficiency changes are carried out. The priority would be placed on changes to the fabric of the building - such as increased insulation and new windows - before changes to services like heating systems and water boilers.

What landlords can do to prepare

Many landlords will be feeling the pressure of the incoming changes - but there are some things you can do to prepare now. 

  • Make sure your EPC is up-to-date: Before you can know what changes you need to make, you need to know what your current EPC is - if necessary, get a new EPC assessment for your property. If your property doesn’t have a valid EPC then it can’t legally be let. Make sure your EPC is valid to avoid fines of up to £30,000 under the new regulations.
  • Check if your property is exempt: There are some properties that will be exempt from the new EPC requirements, so it’s worth confirming whether or not the regulations will impact you. Some exemptions include listed properties, temporary buildings, and some industrial sites and workshops. These buildings may also be subject to additional regulations on what changes can be made - especially to the building exterior.
  • Add insulation first: Insulation is a relatively cheap and easy way to make your property more energy efficient, so prioritise insulation over all other upgrades. Make sure the roof, cavity walls and floors are well insulated. This is also a requirement to be eligible for some energy efficiency grants - like the Boiler Upgrade Scheme.
  • Research funding options: You still have time to secure funding to help you cover the costs of updating your property, so research what grants may be available to you and apply asap.

Top 6 energy efficiency grants available

If you currently own a rental property in England, there are a range of energy efficiency grants that you may be able to qualify for to help fund any upgrades to your property. 

Here are some of the top schemes currently available: 

  1. The Boiler Upgrade Scheme

Get a grant to cover the cost and installation of a new low carbon heating system as part of the Boiler Upgrade Scheme, including: 

  • £5,000 for an air source heat pump 
  • £5,000 for a biomass boiler
  • £6,000 for a ground source heat pump

You may be eligible for up to one grant per property if your current EPC has no outstanding recommendations for loft or cavity wall insulation.

  1. VAT relief on energy saving materials

There is currently zero-rate VAT on the installation of energy-saving materials and heating equipment in your property - including ‘ancillary supplies’ needed for the installation of the materials - until 31 March 2027. Your supplier or contractor will charge you the reduced rate with the VAT savings already applied, but double check with them if you’re not sure.

  1. Energy Company Obligation (ECO) grants

If your tenants qualify as low-income and/or vulnerable households, you may be able to obtain an Energy Company Obligation (ECO) grant to go towards energy efficiency improvements that are fully funded by your energy provider. 

This could include:

  • Installing free electric storage heaters
  • Free cavity wall insulation
  • Loft insulation grants

Check whether or not you or your tenants are eligible here - and apply online.

  1. Empty Property grants

It’s worth checking with your local council to see what schemes are available to help you fund the necessary upgrades you need to meet the new EPC regulations. For example, local empty homes grants can help to cover the cost of boiler work, insulation and windows upgrades if your property has been empty for 6 months or more.

Head to your local council website to see what’s available.

  1. Smart Export Guarantee

For homes that are ahead of the curve and already generating renewable energy, you can get paid to put it into the grid through the Smart Export Guarantee (SEG). This scheme includes energy from solar, wind, hydro and anaerobic digestion.

  1. ECO+ scheme

Running from April 2023 through to March 2026, the ECO+ Scheme includes £1 billion funding to help more households become more energy efficient through insulation measures. There are grants of up to £1,500 available for the least energy-efficient homes in the country, including homes with an EPC rating of D or lower, as well as those in the lowest council tax bands. Check if you qualify here.

Don’t get caught by the new EPC updates

While the government’s new energy efficiency proposals will help to ensure we move towards a more environmentally-friendly future in the UK - the costs and work involved in upgrading your property can seem daunting.

The good news is, you still have time to apply for funding and grants to help you cover the costs of upgrading your property. And with an extension likely on the horizon, you have more time to get organised before the new regulations come into place.

For more help and advice with letting your property, get in touch.