Property industry calls for help in Budget on EPC ratings

The property industry is calling for help in this week’s Budget so property owners and businesses can boost their energy performance certificate (EPC) ratings.

The British Property Federation (BPF) is warning that without urgent action, the UK will fail to hit its 2050 net zero target.

Now the BPF is urging the Chancellor to act swiftly to remove financial barriers for energy-efficiency upgrades.

The organisation says an estimated 58% of properties have an EPC of D or lower in England, with less than a fifth of homeowners planning to improve their property’s energy efficiency.

Landlords are under particular pressure to boost EPC ratings. All new UK tenancies will be expected to meet an EPC rating of C from April 2025. and existing tenancies by 2028, under current proposals.

The BPF, which acts as the voice of the property industry, says the government needs to act swiftly to relieve the pressures on those in the residential sector.

Zero-rate VAT

The action group is calling on the government to zero-rate VAT on building repairs and maintenance of residential buildings to incentivise essential upgrades.

It says the current approach of targeted VAT relief on the installation of energy-saving materials is ineffective, as energy-efficiency improvements are rarely carried out in isolation.

The BPF is proposing an alternative form of tax relief for capital expenditure that would provide full tax relief in one year.

It says the government should also introduce an improvement relief on business rates to ensure property owners are not penalised by rate rises as soon as they have carried out improvement works.

Melanie Leech, Chief Executive of the British Property Federation, said: “The country’s homeowners and commercial property owners face a real challenge in reaching net zero targets and complying with incoming legislative changes.

“The government needs to recognise the importance of incentivising energy upgrades across both the commercial and residential property sectors in the Budget. The Chancellor has a clear opportunity to alleviate costs for households and encourage investment in measures that improve a property’s energy efficiency.”