As a landlord, it’s important to stay compliant with the ever-changing legal requirements in the rental property sector. One of the more significant requirements is that any property which is made available to buy or rent must have an Energy Performance Certificate (EPC).

Find out more as we explore the vital role of Energy Performance Certificates for landlords, outlining what they are, their legal obligation and also the benefits that they bring to your rental properties.

Understanding Energy Performance Certificates (EPCs)

An Energy Performance Certificate (EPC) is a legal document that assesses and rates the energy efficiency of your rental property. It provides an objective evaluation which takes into account various aspects, including heating systems, insulation, lighting, and overall energy consumption. It also offers recommendations for improving energy performance.

EPC ratings range from A (most efficient) to G (least efficient) and they help tenants make informed decisions based on energy efficiency considerations.

Who needs an EPC?

If you own a property that you’re planning on selling or renting then you must obtain an EPC before advertising or letting it to potential buyers or tenants.

What is the minimum level EPC requirement for rented property?

Since April 2018, landlords have been required to achieve a minimum rating of E on the Energy Performance Certificate (EPC) for their rental property for new tenancies or tenancy renewals.

From April 2020, this was extended to cover existing tenancies, meaning all rented properties now need to have an EPC rating of E, even where there has been no change in tenancy.

Under Government proposals, by 2025 homes in the PRS will need a minimum EPC rating of C for new tenancies and in 2028, this will extend to all homes in the sector. However, these new proposals are not yet confirmed, and the Government is due to update its plans.

You can find more information about EPC regulations on the Government website.

How do you obtain an EPC?

To obtain an EPC, you need to hire a qualified energy assessor who will carry out the assessment of your property. These energy assessors are registered and accredited professionals with the necessary expertise to evaluate the energy efficiency of buildings.

During the assessment, the energy assessor will visit your property to collect relevant information, inspect key areas, and gather data on energy-related features. They will then use specialist software to generate the EPC report, which includes the energy efficiency rating, recommendations and other relevant details.

How much does an EPC cost?

The cost of an EPC varies depending on a number of factors, such as the size and type of the property, its location, how many bedrooms it has and also the assessor's fees. However, typical costs range from between £35 to £120. It’s important to note that the cost of an EPC assessment is typically a one-time expense and remains valid for a specific period, usually ten years.

The benefits of EPCs for landlords

Whilst it is a legal requirement to obtain an EPC for your rental property, there are a number of potential benefits. Energy-conscious tenants are increasingly seeking energy-efficient properties to reduce their environmental impact and also to save on utility costs. By obtaining a favourable EPC rating, you can appeal to this growing demographic and attract quality tenants who prioritise sustainability and energy efficiency.

An energy-efficient property with a higher EPC rating can also command a higher rental value. Tenants are often willing to pay more for properties that offer reduced utility expenses, leading to increased rental income and improved return on investment.

As energy efficiency regulations continue to evolve, properties with favourable EPC ratings are better positioned for the future. By investing in energy-saving measures and maintaining a good EPC rating, you can adapt to changing requirements and market demands, reducing the risk of potential disruptions or costly retrofits down the line.

Upon receiving your EPC, it’s important that you review the recommendations provided as implementing energy-saving measures such as improving insulation, upgrading heating systems, or installing energy-efficient lighting, can significantly enhance your property's energy performance and improve its EPC rating.

Overall, staying informed about emerging technologies, renewable energy options, and sustainable practices in the property sector can make a real difference when it comes to making informed decisions about upgrades or renovations to your property. By incorporating these improvements, you can further reduce energy consumption, increase tenant satisfaction and contribute to a more sustainable rental market.

As part of our commitment to help our landlord customers make their properties as environmentally friendly as possible, we offer a range of mortgage products available for buy-to-lets with an EPC rating of A, B or C. Find out more about our green mortgages.