Ten years ago, in 2008, in an attempt to improve the energy efficiency of our homes and reduce greenhouse gasses, the Government launched Energy Performance Certificates (EPCs). They were compulsory for anyone wanting to market their properties for sale or rent but were mostly ignored by buyers and renters and many in the industry derided them as yet another layer of unnecessary bureaucracy. Then energy prices rocketed and people began to pay closer attention to the running costs of any new homes, especially in the rental sector. And, from April of this year any properties with an EPC rating of F or G can no longer be rented out, with fines of up to £5,000 for anyone who fails to comply.
The rules only apply to new tenancies, including renewals. There are a number of exemptions, including; ongoing tenancies (until 2020), holiday lets, if the works would devalue the property or it is not possible to get permission to undertake improvement works. There is also some additional leeway for listed properties or those in conservation areas. For full details – see link at the bottom of the page. In addition, a landlord cannot reasonably refuse a tenant's request for energy efficiency improvements if there are no upfront cost (with some exceptions).
How many properties are likely to be affected?
Only a small percentage of properties have the bottom ratings - 2% have a G rating and 6% have an F rating (source: Centre for Sustainable Energy). However, it is estimated that those figures are double for the rental sector. Shelter’s figures show there are 4,588,000 privately rented homes in England. It means up to 734,080 rental properties could be affected, although until 2020, many longer term tenancies will not be affected.
What kind of properties are rated F and G?
Any properties with poor levels of insulation, solid walls, electric heating, single glazing and draughty windows. The British Property Federation gives some helpful examples of typical properties with low ratings:
1) A small converted, one bed Victorian flat with single glazed windows, solid walls and electric panel heaters – EPC rating F (35).
2) A 1970s flat in a purpose built block with metal, single glazed windows, electric storage heaters and solid walls – EPC rating F (36).
3) 2 bed Victorian end of terrace, with old gas heating system, no insulations, single glazed windows and limited heating controls - EPC rating F (34).
What can I do if one of my properties gets a low rating?
There are a number of ways you can improve your rating, some of which are more effective than others (please note points boosts are for guide purposes only and can vary considerably from case to case).
1) Insulating your loft - will cost around £400 for an average home and boost your EPC score by 10-15 points, depending on the depth of insulation.
2) Condensing boiler – average price £3,000. The Energy Savings Trust (EST) claims this will often provide the biggest boost - up to 20 points when upgrading from an old boiler. Possibly more when replacing an electrical system.
3) Heating controls – individual room thermostats, thermostatic radiator valves can add around 1 point each.
4) Double glazing - £400-£500/window and can add between 5-10 points.
5) Draught excluders – negligible cost but must be permanent fixtures. They have a relatively small impact on your EPC rating, typically adding just 1 point.
6) Hot water jacket – cost as little as £15 and could add 2-3 points.
7) Cavity wall insulation – Costs £450-500 and can boost scores by up to 10 points.
8) Solid wall insulation (internal) for period properties – can be a very expensive option, costing between £5,500 to £8,500 and providing up to 10 extra points.
9) Low energy lighting – replacing your conventional lightbulbs with LEDs gives a 2 point boost.
Thresholds: A = 92 plus, B = 81-91, C = 69-80, D = 55-68, E = 39-54, F = 21-38, G = 1-20
The Energy Saving's Trust says most F and G properties can be brought up to standard for less than £3,000 and the three examples from The British Property Federation could all be done for less than £700.
Are there any schemes to help pay for the improvements?
The Green Deal will fund improvements on a pay as you save basis. The money is paid back over a period of time through your electricity bill, with the monthly payments matching the savings generated by the improvements.
Some local authorities are offering their own energy efficiency schemes.
And there is also the Energy Company Obligation (ECO) scheme for tenants either living in fuel poverty or have a low income.
If you are not sure what your rating would be and what works might be required, the simplest thing to do is to pay for an EPC. They’re not expensive (between £60-£120) and not only will they tell you your rating, but also what you need to do to improve it.