UKRE Update – energy efficiency in rented homes

With rising energy bills and climate change, Energy Performance Certificates (EPC) are of concern to landlords and tenants.

In an EPC, the higher an energy rating of the property, the more energy efficient that property is, which would ordinarily translate as lower energy costs for tenants.

The current legal requirement for EPC and operating from April 2020 is a rating of E (for further information please see the Domestic Minimum Efficiency Standard Regulations). However, by 2028, all tenancies will require a rating of C or a higher energy rating (such as A or B), with new tenancies requiring a rating of C from 2025. There are, however, some exemptions relating to listed properties, for example.

Once the regulations are in place in 2025, landlords who do not hold a compliant EPC could face fines of up to £30,000, so matters do need to be taken seriously.

The Tenancy Deposit Service and the National Residential Landlords Association have produced a guide to improving energy efficiency in rented properties.

It is also very likely that the Council of Mortgage Lenders may be stipulating that a precondition of buy-to-let mortgages in 2025 will also be the EPC rating of C or better.

Practically speaking, there are many cost-effective ways to make a property more energy efficient. These include implementing a smart meter, draft excluding, converting to LED lighting, using thicker fabrics around the home, ensuring the domestic boiler works efficiently and is not set at too high a temperature, checking radiators and draining them regularly and using insulation to protect pipes. Implementing these changes are a straightforward way to improve a property’s overall energy performance.

Other methods, which are more expensive but have longer term benefits include upgrading windows and doors to double/triple glazing, insulating the property, changing to a condensing boiler, using products with an A+++ energy rating, installing solar panels, switching to a ground source heat pump or air source heat pump. These changes are investments and may take time to implement but they will meaningfully contribute towards a more energy efficient home.

For more information, see the National Residential Landlords Association’s Energy Efficiency Guide for Rental Homes which can downloaded here.

And if you need any further information or legal advice, including conveyancing of a property in England, please contact our designated UKRE team Anna Douglass, Alastair Hargreaves, Caren Vidamour and Naledi Odiseng.