If you own a buy to let property, you might already be familiar with the requirement for each property to have an Energy Performance Certificate (EPC). The rules are set to change as part of the Government’s plans to achieve net zero emissions by 2050 and in this article, we’ll look at those changes and how they might affect your property investments.

What is an EPC? 

An EPC rates your property’s energy efficiency from A to G. Currently, a minimum standard of E is required for residential lettings. A better EPC rating can make your property more attractive to potential tenants, as it means their utility costs will be lower.

Each EPC should be updated every 10 years, but under the new regulations you may have to renew much sooner.

How are the regulations changing? 

The minimum EPC rating for new lettings will change from band E to band C. This will be extended to existing lettings in April 2028. A valid EPC will need to be in place at all times while the property is let, and the maximum fine for a breach of the regulations will increase to £30,000 per property.

How will this affect your property investments? 

An estimated 57% of existing let properties were given a rating of D or worse at the beginning of 2021, so there’s a good chance that yours will be affected, and moving your rating from an E to a C could potentially be very expensive. There are proposals to cap spending by landlords at £10,000 per property, but there are no plans as yet for help if the necessary work costs more than this.

It makes sense to start preparing now

While there are some years to go before these changes take effect, the potentially high cost means it makes sense to begin preparations now. This will ensure that you’re not taken by surprise, and you have time to arrange funding if necessary.

What action should landlords take now? 

Your priority as a landlord should be to ensure each of your properties has an up-to-date EPC, so you know what the present position is and potentially what work might be required.

If your property falls below the C standard, look at ways to improve the rating now, while you have time to consider your options and arrange the work. Improvements could include updating the lighting, improving insulation, fitting a more efficient boiler, using a smart meter or even replacing the windows.

Once you have an idea of what work, if any, is required you can get an estimate of the cost, and discuss with your accountant how you will fund the work.

If you have any questions or if we can help in any way, please call our expert team on 01296 468483 or email info@orangegenie.com