BLOG: ‘Now is the time for EPC clarity for landlords and agents’

In 2022, the residential sector accounted for almost a fifth (17%) of the UK’s carbon dioxide emissions. It therefore comes as little surprise that the government has its eyes keenly focussed on how it can cut emissions from our homes.

Amidst the raft of changes and upgrades that will be offered to homeowners in the next few years, also comes changes for landlords.

Confusion

But these changes and timelines have prompted confusion among the industry as different deadlines are rumoured, and still yet to be confirmed.

As it stands, to improve the energy efficiency of UK properties, the government plans on increasing the minimum required Energy Performance Certificate (EPC) rating for rental properties from an E to a C. These proposed EPC minimum requirements will purportedly kick in for new tenancies from 2025 and 2028 for all rental properties.

Uncertainty

This was thrown into uncertainty just recently, with the Housing Secretary [Michael Gove] casting doubt on the 2028 milestone. The view is that too much is being asked of landlords, with too short a deadline and a suggestion that the pace of change should be slowed.

While various opinions are offered and deadlines mooted, where does this leave landlords? Right now, it’s confused. When we spoke to landlords earlier this year, just a third (34%) had heard about the proposed changes through government communications.

Clarity

Almost the same proportion (32%) learned about them through the media, and a fifth (22%) through their own tenants.

What landlords need urgently is clarity. Clarity over the deadlines – whether these changes will come into force in two years, five years or more, and clarity on the proposed plans. Beyond that, landlords want to know what changes they will need to make to their properties, so that they don’t fall foul of legislation.

Again, our research found that almost half (47%) of landlords think the proposed EPC changes are just guidance, and not set to become law, and almost one in five (18%) simply don’t know if the changes will be legislative or not.

If the government plans are confirmed, these will become a legal obligation, and those failing to meet the standards could see themselves on the receiving end of a £30,000 fine (if not more).

Challenging

Since the initial proposals were put forward, the economic landscape has become more challenging. High interest rates, driven by higher than target inflation, has pushed up borrowing costs across the market, and landlords will be feeling this.

This, coupled with the prospect of properties needing upgrades, such as the installation of house insulation, double-glazed windows, or a more efficient heating system, will be weighing on the minds of landlords.

Concerning

Well over a quarter (28%) say the cost of upgrading is extremely concerning given the expense, with the installation of home insulation, for example, costing anywhere between £1,400 and £10,000.

While this push towards carbon zero targets is very much on the right path, what the sector needs now is clear guidance from policymakers. The onus is very much on the Government to help and support landlords in understanding the new guidelines, and improving the energy efficiency of their properties.

Ben Thompson is Deputy CEO at Mortgage Advice Bureau