New 2018 EPC Energy Performance Certificate Legislation

The EPC rating has been a consideration for tenants since 2008 and, in areas where there is a lot of competition, it could have been making the difference between a quick let and the property staying on the market a little longer.

A recent survey of more than 3,000 tenants revealed that 42% consider the ‘green credentials’ of a property important when making a rental decision and that figure rises among tenants over 25, who have more experience of paying utility bills and having to manage living costs.

So, if you are among the 27% of landlords who don’t know their property’s energy rating, as energy company E.ON found in a survey undertaken earlier this year, look at your EPC now, because the government has estimated that one in ten rental properties will fail to meet the new minimum standards that are coming in.

New legislation from April 2018

From 1st April next year, it will be unlawful to let a residential or commercial property with an energy rating of F or G, as shown on the EPC. The new law will immediately apply to new lets and tenancy renewals, and come into force for all existing tenancies two years later, on 1st April 2020.

Mortgage companies and financial institutions will therefore be taking much more interest in your EPC rating as they will need to confirm your property will continue to be lettable after April 2018.

Local authorities can impose a civil penalty of up to £4,000 on landlords who fail to comply with the new regulations and those whose properties are still not up to standard after 3 months could face a fine of up to 20% of the rateable value. On top of that, landlords could stand to lose hundreds, if not thousands of pounds of rental income while the property is legally unlettable.

As such, if your buy to let or commercial property is not currently rated band E or above, you should take steps right away to improve its energy efficiency. As environmental issues increasingly impact legislation, it’s possible that regulations will tighten up even further over the coming years, so it may be wise to see if you can get the rating up to D or above, to give you the best chance of not having to carry out any further energy efficiency improvement works in the foreseeable future.

The legislation states that the requirement to comply only extends to ‘appropriate, permissible and cost-effective’ improvements – further comprehensive information can be found on the Residential Landlords Association website.

If you need to have an energy assessment carried out on your property, you can search for an energy assessor on the DCLG website.