EPC Ratings for Landlords
Buy-to-let landlords can no longer claim a funding exemption from making their properties more energy efficient – meaning they could be on the hook for improvement costs of up to £3,500 and fines of up to £5,000 if they fail to make necessary changes.
In April 2018, EPC rules came in requiring privately rented properties to have a minimum energy performance certificate (EPC) rating of E, but some landlords were exempt from having to improve their properties.
As of 1 April this year, landlords who cannot secure government funding to help bring their properties up to an EPC rating of E, can no longer claim this exemption, and will have to pay for work to be done themselves.
Here we outline energy efficiency improvements you can make, and reveal further rule changes coming in the next few years.
What are the energy efficiency rules for buy-to-let landlords?
The Minimum Energy Efficiency Standards (MEES) were introduced in April 2018, requiring rented properties with new or renewed tenancy contracts to have a minimum energy performance certificate (EPC) rating of E.
Landlords who fail to comply could face fines of up to £5,000.
Until this month, landlords were able to register for the ‘no cost to the landlord’ exemption, which meant that they didn’t have to make improvements if it would leave them out of pocket. However, this exemption was lifted on 1 April.
Landlords with properties rated F or G for energy efficiency will now have to cover the cost of improvements up to a cap of £3,500 if they can’t find alternative funding.
Exemptions are still in place for properties that will cost more than £3,500 to bring up to standard, but landlords may still have to pay for improvements up to that cap.
Energy Performance Certificate (EPC) explained
How much do energy efficiency improvements cost?
While £3,500 is not an insignificant sum, it’s worth noting that only a few buy-to-let owners will face costs this high; it costs an average of £1,200 to upgrade older properties to an EPC grade E.
For context, EPC ratings range from A (best) to G (worst). New-build homes tend to have high EPC ratings, while older homes often have lower ratings of D or E.
The average EPC rating for a UK home is D – so landlords aren’t being asked to make properties any more energy efficient than the average home.