It’s not long until the new energy efficiency rules for tenanted properties come into place, which could affect over one million properties across the UK. To understand the implications and necessary preparations, we held a quick Q&A with our Lettings Manager, Michael Clarke.
So, when do the new energy performance ratings come into force?
The new regulations will come into effect from 1st April 2018 for all new lets and renewals, although existing tenancies will need to implement these new requirements by 1st April 2020. The full guidelines for landlords are detailed here.
Who will this benefit and why?
Essentially, these changes aim to create a safer and habitable environment for tenants, while also trying to protect our environment and surroundings. Studies have found there are also significant financial benefits, with ‘E’ rated properties making a saving of up to £1150 a year, in comparison to those rated ‘G’. This equates to just over £95 each month!
There are various types of tenanted properties, do the new EPC rules apply to any specific type of property?
The new legislation applies to all domestic properties in England and Wales that are tenanted for over 6 months, including commercial lets. There is a similar legislation already in place in Scotland.
What if a landlord has recently tenanted their property?
The April 2018 legislation only applies to all new tenancies, so all existing tenancies will not be affected just yet. For instance, if the minimum term has ended and there is still a contract in place, the tenancy will not be affected until the later date of April 2020. With this in mind, it is still advisable to check the latest energy efficiency report, for the rating, when it was carried out and the report highlight advisories, which can often be cheap to implement. There is certainly no harm in getting ahead of yourself and having a new assessment carried out now, even if the existing report is in date.
Is it possible to get an energy performance assessment, even if an EPC certificate is still in date?
Energy assessment guidelines do change from time to time. So, if a landlord had an EPC assessment some time ago it will probably be useful to do so for additional peace of mind. All certificates are valid for 10 years, so there is certainly no harm in having a new assessment carried out a little sooner.
How do landlords find out what their current EPC rating is?
If landlords have previously had an EPC assessment, the full report will be available here, on the EPC register. Just follow the link and find the tenanted property using its postcode. Here is an example of what it should look like. The key areas to check are the ‘Date of certification’, ‘Energy Efficiency Rating’, ‘Top actions to make your home more efficient’ and ‘Recommendations’.
What if the property’s EPC rating is lower than an ‘E’?
The starting point would be to follow the recommendations provided in the individual energy performance report. In this example, there are four recommendations, which should help the individual achieve a ‘C’ rating and an additional saving of £74 each year.
Once all improvements have been made, the landlord must instruct a new assessment to identify the new rating. It would be rare to find the improvements have not assisted in improving a property’s EPC rating, but if the new EPC rating is still below an ‘E’ it would simply be a case of making the further suggested improvements. It is important to remember the recommendations in the table are cumulative. In other words, the rating in the ‘Rating After Improvement’ column shows you what the rating would be if you carried out that improvement and all the improvements above it in the table. So, it is most advisable to carry out all recommendations.
Is there any support available to help landlords finance the improvement works?
For general advice and assistance on energy efficiency funding, landlords can contact the Energy Savings Advice Service on 0300 123 1234. With scheme specific information below:
- Green Deal Finance: search for a local Green Deal Provider using the Green Deal Finance Company website gdfc.co.uk
- ECO help to heat programme: contact the Energy Savings Advice Service on 0300 123 1234
Do landlords need to get another EPC assessment once the improvements have been actioned?
According to the Building Regulations 2010, a landlord will be required to obtain a new EPC assessment after making the necessary energy performance improvements to their let property. We can always refer landlords to our preferred contractor, who offers a subsidy for reassessments. As a former estate agent, he is well acquainted with all aspects of the property industry and will be able to provide further guidance if required.
Should landlords prepare their property before the energy performance check?
There are some obvious areas to consider, such as insulation, roof insulation, window glazing, individual radiator thermostats, SMART heating controls and draft entry points. Most importantly, it is important to assess the home as a whole, as it can be easy to overlook key issues. For instance, if wall insulation has been installed but the draft around the windows not sealed, it would create a cold spot in an otherwise warm space, which is a primary cause of condensation and mould. So, if you are not confident with DIY, it would be advisable to instruct a professional to carry out any visible changes, particularly if you have an older property.
Earlier, you mentioned EPCs are valid for 10 years, does this apply in all cases?
In simple words, yes. All EPCs are valid for a 10 year term, the age or type of property does not usually affect the term of certification.
Will landlords receive reminders of when to renew?
Unfortunately, nothing as such has been put into place by the governing bodies, so it will be the landlords’ responsibility to ensure their certificate is compliant and in date. We have taken measures to put into place an EPC management system for each of our clients, alerting us to remind landlords of their energy assessment renewal. This offers a protective measure over the situation, giving our clients enough notice to have an assessment carried out with time for further action if required.
So, going back to the legislation that comes into effect from April 2020, what does this imply and who does this effect?
Principally, it is the same requirement which aims to cover all tenanted properties, from April 2020 all tenanted properties will need to have an EPC rating of an ‘E’ or above. This will apply in all instances or cases, even if a tenancy is already underway and there are no plans to renew. The aim is to ensure all tenanted properties across England and Wales meet the minimum ‘E’ rating. Failure to meet the new standards could incur a penalty.
What are these penalties?
If a property proves to be in breach of the new regulations, there are fines of up to £5,000 per property. The penalty will be based on how long the breach has lasted, for instance, for a period of fewer than 3 months, the financial penalty will be up to £2,000. Full guidelines are listed in the updated landlord brochure, click here.
Are there any further consquences?
Essentially, it is important to ensure landlords are compliant and meet the new legislation, but at the same time, what many will not be aware of, is that landlords are unable to serve notice or renew tenancies without a valid EPC certificate.
Where can landlords find contact details for energy performance assessors?
Firstly, it is important to ensure an accredited energy performance assessor is appointed, details can found on the EPC register website. We can put landlords in touch with our preferred assessor, just contact the office on 01252 514000 or email: firstname.lastname@example.org
Any final recommendations?
In my opinion, it would be advisable for all landlords to get compliant now, or if they have not already done so, get on the EPC register and find their rating. There is never any harm in staying ahead of the game, so while they may have a tenancy in place, the improvements will inevitably need to be made at some point, so why not now?
If you would like to discuss the coming changes, a valuation, or anything else relating to the world of lettings, contact Michael or the Lettings team, on 01252 51400 or email: email@example.com.