From 2025, all newly rented properties in England and Wales will need to have an Energy Performance Certificate (EPC) rating of C or above. Properties that are already rented will have until 2028 to comply. We explore the specifics of these rule changes, and what they mean for landlords.
What are the EPC changes landlords need to be aware of?
At the moment, all rented properties in England and Wales need to have an Energy Performance Certificate (EPC) rating of E or above.
Quick recap – an EPC is a certificate that provides an official rating of how energy efficient a property is. Properties are rated A to G, with A being the best and G being the poorest. EPCs also provide recommendations for improvements that can be made to a property to make it more energy efficient.
In 2025 and then 2028 the EPC rules for landlords are changing in England and Wales:
- From 2025, all newly rented properties will need an EPC rating of C or above.
- From 2028, all rented properties will need to have an EPC rating of C or above – regardless of whether they already have tenants or not.
This means many landlords will need to carry out improvements to their properties to make them more energy efficient in time for these dates. (Head to the bottom of this article for ways to fund energy efficiency improvements).
For EPC information in Scotland, head here. For EPC information in Northern Ireland, head here.
Do landlords need to provide an EPC certificate?
Yes – landlords have to get an EPC certificate for all of their rental properties by law. And it’s crucial that their properties meet the correct EPC requirements in time for the dates above ☝️.
If your local authority finds out you’ve failed to comply with the Minimum Energy Efficiency Standards (MEES), you could get fined up to £5000.
If you’re only just learning about all this – you’re definitely not alone! A recent study carried out by Shawbrook Bank revealed that over a quarter of landlords said they had little to no knowledge of the upcoming changes to EPC rules.
Where can landlords find their current EPC certificate?
If a property is in England, Wales or Northern Ireland, you can find its energy certificate by heading to this Government web page. For properties in Scotland, head here.
Hammock users can also find all their properties’ EPC information in their account – we know it’s easier when everything is in one place!
How do landlords get an EPC certificate?
To get an EPC, you need to arrange for an accredited energy assessor to visit your property and carry out a survey.
They’ll assess your property’s:
- Heating systems
- Roofs, walls and insulation
- Building dimensions
- How old the property is
- Any renewable energy devices the property has, like solar panels
The assessor will then produce an EPC for you, grading your property from A to G.
The certificate provides a detailed breakdown of information about the property’s energy efficiency with recommended measures for how to improve this. It gives cost estimates for each of the improvements too, and indicates the potential rating a property will have after carrying out these improvements.
It’s worth bearing in mind that the estimates for investment needed can be pretty broad. So it’s important to seek some advice from specialists before committing to any work. They’ll be able to provide more accurate quotes and let you know how feasible the work is.
Here’s a quick glance at what you can expect to see on your EPC:
- The current and potential energy costs for the property
- A description and energy rating from one to five stars (five being best) for each energy-related element of the property – for example, the type of walls, roof, floor, heating and windows
- Recommendations for improving the property’s energy efficiency with an estimated investment cost for each of these – for example, ‘internal or external wall insulation – £4000-£14,0000’
- A final section detailing the property’s carbon dioxide emissions; this is where the overall environmental impact rating from A – G is provided
It’s important to note that landlords are responsible for getting an EPC – not the tenant/s of a property.
How often do landlords need to renew EPC certificates?
An EPC expires after 10 years. But technically, if your EPC expires before a tenancy agreement comes to an end, you don’t need to renew the EPC straight away.
You do, however, need to renew it if you want to start a new tenancy agreement or sell the property.
This gives you a bit of leeway, but it’s probably best not to leave getting a new EPC assessment for too long after the 10-year mark. Taking proactive measures earlier on to keep your property EPC-compliant is likely to save you time and money in the long run.
How can landlords fund energy efficient improvements?
There are various grants available to help with energy efficiency improvements. But it’s likely these won’t be enough to cover all works for landlords to meet the new EPC requirements. This means many landlords will need to fund the changes to their properties, at least partly, by themselves.
It’s worth noting that a lot of the grants available are aimed at tenants. But, as a landlord, you can support your tenants in pursuing them.
Grants to look into include:
- The Energy Company Obligation (ECO) scheme
- The Green Deal
- Local authority grants – you might be able to get funding from your local authority if you plan on buying up empty properties to rent out
Can landlords increase rent to help cover the cost of energy improvements?
Yes – some landlords are already doing this. In a 2021 survey of 1000 landlords, over half said they’d be passing at least some of the costs associated with improving energy efficiency onto their tenants. And 18% said they expect rents to rise as a natural consequence of the new EPC requirements.
Of course, all the usual rules around increasing rent still apply.
How will the EPC changes affect Buy to Let mortgages?
Currently, it’s difficult to get a Buy to Let mortgage for properties that don’t meet the EPC requirements. So that means, from 2025, that’ll include properties that have a D, E, F or G rating.
Another mortgage consideration to keep in mind is that, because of the recent push towards making rental properties greener, some mortgage lenders have launched new ‘green’ products. Essentially – there are potential discounts and deals to be had for borrowers who invest in greener properties, which could be a theme that grows as we move towards 2025.
Exemptions for EPC certificates
It’s important to know that there are some exemptions to the EPC rules. You need to officially register an exemption if you plan on not getting an EPC.
Some of these exemptions are pretty straightforward, and include:
- Listed buildings where improving the EPC rating would mean having to change the property in ways that would unacceptably alter it.
- Temporary buildings that are going to be used for two years or less.
- Residential properties that will be used for less than four months a year.
Other exemptions are a little more complicated. You can read in detail about them via UK Gov – but here’s a quick overview:
- ‘All relevant improvements made’ exemption – if you’ve made all possible improvements up to a price cap of £3,500, but the property still doesn’t meet EPC standards.
- ‘High cost’ exemption – if the cost of installing even the cheapest possible measure would be more than £3,500.
- Wall insulation exemption – if the only relevant improvements for your property are to install wall insulation, and this would negatively impact the fabric or structure of the building.
- Third-party consent exemption – if you need permission from a third-party to carry out the improvements (like a tenant), but can’t get this despite your best efforts.
- Property devaluation exemption – if making energy efficiency improvements to your property would devalue it by more than 5%.
- ‘Recently becoming a landlord’ temporary exemption – you can delay getting an EPC for six months after the date you first became a landlord.
You need to provide specific types of proof for a lot of these exemptions. And most of them only last for 5 years, when you’ll have to go through the process of registering them again.
Stay on top of your EPC ratings
The EPC changes for landlords amongst all other admin and finances can be stressful. That’s why we aim to cover all bases with our property finance management platform – including EPC ratings; we can provide you with EPCs for your properties, and will also send you handy reminders when your certificates are expiring.
To find out all the ways Hammock helps you manage your property finances with minimal stress – including bookkeeping, property tax, and investment insights just head here.
Our guide is for educational purposes only, as we don’t provide tax advice. We always recommend consulting experts (in this case your accountant or tax advisor) when dealing with rules and regulations.