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Energy Performance Certificates

Since October 2008, landlords in England and Wales have provided an EPC (Energy Performance Certificate) to all new and prospective tenants. From 1 April 2018, landlords are required to achieve a minimum rating of ‘E’ on the EPC for their rental property.

Unless there is an accepted exemption, landlords face a penalty of up to £4,000 from Trading Standards for failure to meet the minimum efficiency standard.

Who needs an EPC?

Each property is required to have its own EPC. This means all self-contained flats and houses are subject to the regulations.

Where the rental unit is situated within a larger property, eg a bedsit or room lets with shared facilities, landlords don’t need an EPC for each separate tenancy. However, a house let to students on a single tenancy will require an EPC for the whole house.

Where a tenant sub-lets a dwelling, the responsibility to produce the EPC lies with the person letting the property.

Landlords and agents will need to have an EPC within seven days of marketing a property.

EPC energy ratings

The EPC gives each building a SAP (Standard Assessment Procedure) rating. This equates to an energy rating from A to G (A is very efficient and G is very inefficient), like those already seen on white goods. In layman’s terms, the certificate will show the energy efficiency levels of a property, so a prospective tenant is able to determine and compare the relative financial running costs of renting a property.

The certificate also includes the following information:

  • An estimate of the energy the property potentially uses
  • Fuel costs - an indication of how much it will cost to heat and power the property
  • Details of potential savings that could be made if energy efficiency improvements are made
  • Carbon dioxide emissions
  • Details of the person who carried out the assessment
  • Who to contact for complaints

Qualified Energy Assessors

The EPC is produced by a qualified Energy Assessor who visits the rental property and gathers vital information to produce the certificate.

Each certificate will last for ten years unless major renovation work is carried out on the property.

Property owners can voluntarily get a new certificate after installation of energy efficiency measures – particularly if these improve the energy rating. If a newer EPC has been produced for a home within the ten-year period, only the most recent one is valid.

The costs an Energy Assessor may charge vary quite widely, anywhere from £50 to £100 plus depending on location.

Energy efficiency improvements

Often the Assessor will recommend energy efficiency measures such as loft and or cavity wall insulation (where it can be fitted), thermostatic radiator valves and double glazing. Other provisions to consider are installing a new boiler (if the original is over ten years old) and checking for heat escaping from the property by use of a thermal imaging camera.

Thermal imaging technology has moved on apace in recent years, so much so that today landlords can buy an attachment for their smart phone and instantly have a thermal camera at their disposal.

Thermal imaging will allow landlords to check around doors and windows, where pipes exit the property and for cold-spots in radiators.

This technology can help to identify quick fixes (and stay on top of property maintenance) which may or may not help reach the required ‘E Rating’ or above on the EPC.

Stand out from the crowd

Like it or loathe it this new requirement of an ‘E’ rating on an EPC could be the beginning of an upwards trend in years to come. Acting now will not only allow landlords to continue to rent out their property but could also stand them in good stead for the future.

While an ‘E’ rating on their EPC will allow landlords to continue to rent out their property to new tenants from April 2018, landlords can take the opportunity to stand out from the crowd and aim higher, talking to the Energy Assessor about further improvements and engaging with their energy supplier about any assistance they may be able to offer. A ‘D’ rating or even a ‘C’ rating would be more appealing to a new tenant than an ‘E’ rating.

For further energy efficiency advice the Energy Savings Trust website is a great place to start.

26 March 2018

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551