With ongoing turmoil in the Middle East, energy prices are a hot topic of discussion.
But for landlords, there’s another reason to be thinking about the cost of heating and the energy efficiency of their rental properties.
Plans to overhaul Energy Performance Certificates (EPCs) are coming.
And while the deadline for proposed changes has been pushed back, it makes sense to prepare for the new rules sooner rather than later.
Here’s what landlords need to know.
EPC revamp
The government says it wants to improve the accuracy of EPCs. For the private rental sector, this means updating the Minimum Energy Efficiency Standards (MEES).
Initially, the government floated a plan that would have required rental properties to have an EPC rating of C for all new tenancies by 2028.
However, common sense has since prevailed, and this deadline has been deferred.
All rental properties will now require an EPC rating of C by October 2030. If a property doesn’t meet this requirement (or has no valid exemption), it can’t be rented out.
The maximum amount landlords will need to spend on improvements has also been revised downwards to £10,000. This figure includes all improvements made from October 2025.
Running alongside this new deadline is a change in the way EPCs will be assessed. A new EPC methodology, or Home Energy Model (HEM), will be introduced in October 2029. This will be based on energy costs, fabric performance (covering factors such as insulation and windows), heating system and smart readiness.
Next steps
First, don’t panic. Focus on understanding what the changes entail and on forming a sensible plan. Don’t splash out on expensive improvements until you’ve done your homework. At the same time, don’t bury your head in the sand and pretend that it will never happen.
Second, understand that there is no one-size-fits-all approach to preparing for the change. The best way forward will largely depend on your property’s current energy efficiency rating.
The National Residential Landlord Association (NRLA) has provided some guidance.
If your rental:
Already has an EPC rating of C…
While you don’t have to do anything, consider getting a new EPC anyway. Any property issued with an EPC rating of C before October 2029 will be considered compliant for a decade.
Falls just below an EPC rating of C…
Consider making improvements now to secure a C rating just before September 2029.
Has been improved significantly since its last EPC…
Think about getting a new EPC. That way, you’ll know how close you are to reaching a C rating. You could be there already, or able to reach a C with a few minor upgrades.
Has solar panels or a heat pump…
If this is the case, you may wish to wait until after the HEM methodology is released in October 2029. The new system is expected to favour solar panels and heat pumps, so you could find yourself in a strong position under the new guidelines.
Is going to need a lot of work to bring it up to a C rating…
Wait until October 2029 so you know exactly what the HEM involves and can carefully target your improvements to ensure you get the most bang for your buck.
Want to know more? We’re here to help landlords navigate all rental regulations. Call us today.
