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Government proposals on EPC ratings for rental properties

Published: 23/12/2021

Improving energy performance is crucial in the government’s drive to meet its net zero carbon emissions by 2050.
At present private rental properties must meet a minimum level of energy efficiency which is an EPC (Energy Performance Certificate) rating of E. However the government is proposing changes to this in order to help it reach its net zero target.

These proposals, which are made in the Minimum Energy Performance of Buildings Bill, are:

1.  all new residential tenancies must have an energy efficiency performance of at least EPC Band C from 31 December 2025; and

2. all existing residential tenancies must have a rating of at least EPC Band C from 31 December 2028.

What might this mean for landlords?

There will be a not insignificant cost to landlords in making the required improvements which may include replacement of gas boilers, improvement of insulation of walls and roof and installation of double or even triple glazing.

Landlords may suffer a potential loss of rental income while such improvements are being carried out if their tenants need to move out during the works.

Then there is the question whether the changes made to the property will make a return on the landlord’s investment, at least in the short term. The cost of the works for some landlords may far exceed the potential rental income.

Will the government help with the cost of any works?

It is not yet known if the government will offer financial assistance by way of grants.

Is this compulsory yet?

No. The Minimum Energy Performance of Buildings Bill has been making its way