Compulsory EPC band “C” by 2025 causing confusion

Is it law that landlords must bring their rented properties up to band “C” by 2025?

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Please Note: This Article is 2 years old. This increases the likelihood that some or all of it's content is now outdated.

Compulsory EPC band “C” by 2025 causing confusion

There have been recent confusing reports put out that from 2025, all newly rented properties in England & Wales will be required to have an EPC rating of band C or above.

This is somewhat misleading and “jumping the gun” as so far this is only a Government proposal following a recent energy performance consultation. But it does form part of the Minimum Energy Performance of Buildings (No. 2) Bill currently wending its way through Parliament.

And, given the Government’s public commitment to net zero by 2050 at the recent international COP 26 hosted in Glasgow last year, it is looking as if the new standards will come in or at least something very close to the proposed changes.

The Bill states:

The Secretary of State must amend the Energy Efficiency (Private Rented 15 Property) (England and Wales) Regulations 2015 (SI 2015/962) to require that, subject to subsection (2)—

(a) all new tenancies must have an energy efficiency performance of at least EPC Band C from 31 December 2025; and

(b) all existing tenancies must be at least EPC Band C from 31 December 20 2028 where practical, cost-effective and affordable as defined under section 1(4).

What are the current regulations?

Currently, any property in England, Scotland or Wales that is either being built, marketed for sale or let as an entire property requires an Energy Performance Certificate (EPC). Since the 1st of October 2008, landlords letting whole properties must have a valid EPC rated at “E” or above to provide to prospective tenants. EPCs are valid for ten years. After this time, landlords are only required to get a new EPC if they are re-letting to a new tenant.

The Government’s proposal in the Bill is that rental properties meet a compulsory energy performance certificate rating of band “C” on new tenancies by December 2025, and on all rented properties by December 2028. Consequently these proposals must be taken seriously, but we’re not there yet.

Small-landlords confused or not yet aware

According to a recent House of Lords report on housing demand, around 45% of landlords own just one rental property, and another 38% own between two and four properties. Given that many of these people don’t follow developments too closely, many will be unaware of these potential changes which will affected them financially.

Some rental properties will require the substantial sums needed to bring them up to EPC band “C” and this is scary territory for many rental property owners, it’s causing a lot of concern.

One recent report by The Daily Mail’s This is Money claims that one-third of landlords were “not confident” they would be able to get their properties up to this standard. Some had said they were unable to afford the required improvements which may include such things as replacing old gas boilers, improving floor, ceiling and wall insulation insulation and installing double glazing in windows and doors.

Others said they did not see how they could do the necessary work with tenants in situ, and that they did not want to face the expense and loss of income by evicting them or finding temporary alternative accommodation. Others said they were unclear as to what they would need to do to bring their properties up to this standard because the Government had not provided enough guidance.

Plan ahead

Although there is still uncertainty as to what the final rules will be, or even if the change will happen, the fact remains that sooner or later the standards will need to be improved.

Landlords might as well “bite the bullet” sooner rather than later and plan to make impoundments when opportunities arise. One such opportunity would be when tenancies come to an end and before a new one begins.

Start off by taking a look at the recommendations in the current EPC document. This should give a guide, though it is perhaps more beneficial to get some builders’ estimates from people who know what they are doing when it comes to energy efficiency improvements.

See: Landlords advised to future-proof properties by aiming higher with EPC standards

The Government and many campaigning groups see improving energy efficiency in British rental homes as a priority and there is no doubt that many of these homes have woeful standards which not only add a lost to the cost of heating, they affect the occupants’ health.

According to the latest figures available from the Department for Business, Energy and Industrial Strategy, UK homes account for 15 per cent of the county’s greenhouse gas emissions, a lot of which is down to poor insulation standards, heat is being paid for and lost unnecessarily.

Is there any financial assistance for property EPC upgrades?

The Government tried in the past to offer support through Green Homes Grant, available to landlords as well as homeowners, but the scheme was quickly abandoned. Given that there is a lot of political pressure to meet green energy targets however, it is possible that some form of financial support may be offered to landlords in the future, but so far there is nothing on the table.

Please Note: This Article is 2 years old. This increases the likelihood that some or all of it's content is now outdated.

35 COMMENTS

  1. If you are correcting false assumptions about what is currently law you ought to get your own facts right – mandatory EPC E for rentals was not introduced in 2008, EPCs were introduce in 2008. Mandatory E for rentals came much later..

    Advising LLs to ‘bite the bullet’ might also come back to haunt you given that the legislation has not been published; expense incurred early may not count towards the threshold spend & there is a change to the EPC algorithm due in Summer 2020 both which could impact on work a LL may choose to do.

    I don’t think I will be making any ‘impoundments’ and if I was I would not be taking a ‘builder’s’ advice about what improvements to make and the effect on the EPC.

    Overall, Tom, a very sloppy piece.

    • Slightly harsh, in that the article was meant as a reaity check for recent reports about MEES epc standards as you know Tricia, but I understand the sentiment. Could do with dusting off the grammar book a little also Tom.

  2. Couldn’t agree more Tricia. The advice from NRLA is certainly not to make “impoundments” yet especially because they may not count towards the threshold spend which is proposed to be be raised to £10,000.
    Each time the algorithm is changed EPCs spew out all sorts of changes – in my experience by reducing the count – so selling might be better than improving! Further if the green levies are removed what effect will that have on EPCs. Whilst I don’t advocate NRLA’s wait and see approach I certainly wont be going down the road of some “impoundments” such as external wall insulation or digging up concrete floors. I might put up a wind turbine though 🙂

  3. As a newby LL these recent epc reports are alarming. It suggests that for any new LL’s buying further properties need to seriously look at the current and, perhaps more importantly, potential epc rating. As it stands, the options seem to be either exemption, reasonable costs to implement, green schemes for grants or exit.

    There still seems to be quite a lot of variables such as the proposed thresholds, penalty fines for prosecuted LL’s from £5k max to proposed £30k, double ouch etc but it seems almost inevitable some of this will stick.

  4. I’ve read the Minimum Energy Performance of Buildings (No. 2) Bill as fed by the above link and currently in it’s second reading. Other than for Domestic Premises 1.(2)(c), £20,000, I cannot see any proposed ‘threshold’ figure for Privately Rented Properties (currently £3,500 I believe).
    Sandra above states this to be £10,000 (I assume that’s for PRP) but can Sandra or anyone direct me to the clause in the Bill please? At any rate where is this info coming from?
    I only see 2.(2): “A landlord is exempt from the duty in subsection (1) to bring a property up to EPC Band C if they meet the criteria for an affordability exemption, as may be specified in regulations made by the Secretary of State”.
    Thanks

  5. The assertion that there is no help for landlords now thst the green ho es grant is gone is incorrect, you can get eco grants based on your tenants status, if your tenant receives certain benefits or has a low income then the landlord can qualify for a fully funded eco grant for internal, external, loft, underfloor or flat roof insulation and also partly funded first time gas central heating if the property currently has no heating or electric heating and has a low epc.

  6. We are in total disbelief that we are in a position where we have no choice but spend money with little chances of a return on our investment.
    There’s going to be an awful lot of band d and below ex rental property coming to the market

    • yep…all of mine will be, so fed up of these ivory tower regulations coming out with so little practical thoughts to the process, or cost to the landlord. Wrote to my MP, Welsh SM Adam Pryce, his response was to suggest that for too long landlords have had it too good. Not really a helpful reply at all, so I will still be selling, and then the labour government in Wales will have a hard time housing everyone, with their poorly thought through social housing mandates over the last 30+ years

    • LMAO. So you actually have to provide tenants with habitable accommodation and that’s too much for you. Go take a long hard look at yourself. WTF.

  7. Why don’t you do a sensible article and find out exactly what is needed for band C EPC? Our tenant is very happy with things as they are. He says the house is warm and comfortable and cannot understand why we have to spend unnceccesary money on EPC improvements. He is wise enough to know that rents will have to be raised and despite trailing the internet through no advice given, we in Wales, on the whole have old property with stone walls and looked after properly does not create any problems. Equal respect from our tenant and ourselves complete the picture. What right have politicians who know nothing to interfere? We have more than enough with Julie James’ draconian new bill without loosing sleep over the EPC as well. Carry on like this and there will be no rental properties on the market in Wales;

    • Hi Beryl,
      Unfortunately the best you can do is talk to your EPC surveyor and get them to run a number of scenarios to see which is most likely to give an economic solution. Hope you have timber floors and the property is not listed or in a conservation area or national park. Sounds like your rooms may become smaller if you cannot insulate them externally
      The big thing I don’t understand is why this does not seem to apply to holiday homes!
      I hope the building is not on oil that’s going as well at the same time.
      I recon it is just a Westminster ploy to get rid accidental landlords with the odd property or two, so they can cut the workload of the HMRC and sack a few civil servants before the change is implemented.
      No doubt Rent Smart Wales will be checking up on this.
      Have fun in deciding when to sell up it’s going to be difficult one to judge.
      Best of Luck
      Martyn

    • You are so right Beryl, already there were 22,000 more houses sold in the buy to let market, than were purchased by prospective landlords, and tales of tenants being put up in hotels, at high costs to tax payers, because of zero social housing being available in Wales does nothing to instils confidence that the government gets anything right, they think they are doing the tenants and the planet a favour, where in fact its creating more problems that it is designed to solve. We all know who the real carbon output culprits are, and does the government challenge them or threaten to fine them with the same heavy hand that they do landlords in Wales……..I think not. I for one am selling up

      • No the govt does not think they are doing renters a favour. They know exactly what they are doing. Destroying the middle class and private property ownership. Notice council housing is exempt? It’s an asset and wealth grab for the govt and big corps. Just like covid lockdowns. The biggest wealth transfer in history. it’s completely planned and implemented with surgical precision.

  8. Does anybody know if the supposed new EPC grade C and above applies to all rental or only those rental properties who have an outstanding mortgage?

    • Will be even worse when Labour start treating rental income in line with prevailing tax levels.

      It makes sense to sell off now.
      Hopefully some mug FTB will buy it as they are generally ignorant about all things EPC.ALL rental properties.

      It is IRRELEVANT if there is a mortgage on the property.

  9. If an EPC with say a ‘D’ rating expires before 31 December 2025 (assuming proposals go ahead) and the same tenant remains in occupation as at 31 December 2025 and 31st December 2028, am I correct in thinking you would not need a new EPC? You will only need a minimum of ‘C’ rating where an EPC exists? Obviously, would then need one with a minimum ‘C’ rating if the property becomes vacant and is remarketed.

  10. Unfortunately we are now living in a increasingly quasi-fascist culture. Especially when in comes to Central or local government enforcing its agenda or tax grab. Our property was recently (quite out of the blue to us) classified as something called an ‘additional HMO’. This means it’s not an HMO but now has to be treated as one. The licence fee per room was £520 (we have four rooms) – I believe an actual HMO licence has a significantly cheaper per room price! – it’s a simple tax grab on landlords. This re-classification was dropped on landlords in the area with smug legal statements that unless the licence was obtain we would suffer (£30,000 or unlimited fines or the property being taken over by the court) and that no landlord would be legally allowed to end a tenancy agreement until the Licence was obtained. There are also rules that tenants can recover rent for periods when the property isn’t correctly licenced!! We had to take out five lovely Victorian doors, install hard wired fire alarms, emergency lights, submit plans, ect. All very expensive and all with our hands tied, so that if we chose, as British citizens to not become ‘HMO’ landlords and sought instead to end the tenancy and use the property for something else we could have potentially come into legal difficulties. Expect no less with these changes !!

  11. As regards the Epc, it would make more sense to get an Epc assessor to discuss the best way to get the property to a C. I find sometimes that although with the best intentions builders / electricians / heating engineers advise people to make changes without understanding what that advise will mean to the Epc rating. There is lots of marketing blurb on the net for instance about electrical heating appliances being ‘100% efficient’ however when the Epc is done these devices / systems often score very badly.

    • This idea will not come to fruition. The UK has 12.6 million houses at band D or lower – that’s more than half of all houses in the country. If the government go ahead almost all small landlords will sell up as the sums simply do not work. Overnight there will be .. what? … 40% ?? less houses to rent. You cannot rip 40% of the supply of anything and not see a collapse.

  12. We have repeatedly (including last evening, 06/07/22) contacted our EPC assessor who adamantly refuses to discuss any assessment requirement saying that the compulsory C rating does not exist at the moment, and he understands the system is due for a major overhaul. He then ends the telephone call.
    All very well to say, plan for the future. What future will we have if our income is raided?

  13. Does anyone know a solution to borrowing quickly at low value to fund upgrades, seems to be little flexibility on early repayments for most personal loans and bridging providers seem to have quite a high minimum borrowing that I don’t need!!

  14. Will the new 2025 EPC grade C rating for rental properties apply to Listed Buildings and other regulated properties such as those within a Conservation Area? Many of the suggested energy upgrading plans on current EPCs refer to the addition of photovoltaic panels, etc., which would not presently be permitted.

  15. The buyer of our flat, which they were going to let as an hmo has just pulled out because the epc was D and not C. It’s a very warm upstairs flat and my partner rarely needs to put the heating on for long but this has made no difference, as they are worried about the new legislation coming in.

    • What is the EPC number score? Is it far away from “C”? The recommendations on the EPC report are usually very clear and practical on how to implement improvements. Also check the accuracy of the report as to your existing insulation, I had improved external wall insulation which surveyor was unaware of, but when proved by me the EPC score crept into the next band. Keep detailed receipts of existing improvements and dated photos of the improvement work.
      Consider paying for a fresh EPC report from another surveyor if the number score is very close to next higher band in order to double check position.

  16. I was able to get a £5k grant towards external insulation, this still left me with an £18k bill. The rent is £525. Clearly the sums just don’t add up. I would be forced to sell, another property off the rental market.

    • Will be even worse when Labour start treating rental income in line with prevailing tax levels.

      It makes sense to sell off now.
      Hopefully some mug FTB will buy it as they are generally ignorant about all things EPC.

  17. One of our properties is a large mid terraced house in the middle of three houses that were at one time shops.
    Built around the 1860’s they are of solid brick wall construction. Solid floors with quarry tiles. The EPC is a D.
    To raise it to a C would mean stripping all the plaster of the walls & replacing it with insulated plaster board.
    Jack hammering the floors the fit insulation & finish.
    The cost has been quoted at £12000, the problem id that if the two adjacent house, one on either side do nothing & of the work on mine with not see an EPG C.
    The simple option is to sell!

    • Yours is a logic that many other LL will share.

      But LL such as yourself should have been selling off for years now.

      The EPC C status problems have been known about for years.

      It now seems that all of a sudden LL are realising the dud properties they have need to be sold off.

      These dud properties need to be sold at top market orice to ignorant FTB who are generally clueless about EPC status.

      Obviously it doesn’t affect them but of course it would if they ever wanted to sell.

      They would be selling into a restricted market as few LL would be interested in such a property.

      LL are significant purchasers of property.

      There is no doubt though that LL need to sell off these dud sun-C status properties ASAP to maximise capital gain.

      There will be a flood of these properties coming to market once more LL realise they have dud properties.

      I have seen lots of properties being put up for sale many with tenants in situ.

      These are generally all dud properties.

      Only stupid LL will buy these.

      LL are unable to achieve vacant possession so they are hoping a mug LL will buy.

      They probably could eventually achieve vacant possession but during that time the tenant will stop paying any rent and it will take at least a year to evict.
      LL are scheduled to lose billions in their efforts to sell off dud properties.

  18. Ultimately this will lead to a mass exit of private landlords from the market, a mass of no fault evictions from houses that are below C and then a mass rental increase as demand for the drastically reduced volume of private rental properties increases. There are nowhere near enough social houses to cover the loss of private lets so where are the people supposed to live. Another staggeringly short sighted and stupid move from the dictators in Westminster

  19. My biggest concern with this Bill is the EPC because it is cheap to produce is very rough and ready. Whilst I agree from a technical point of view underfloor insulation is the gold standard to achieve the well insulated Fabric first. The EPC estimates do not allow for incidental costs of renewals due to the floor being taken up of new kitchen, bathrooms, decorations etc. This part of the EPC system is most ill thought out. On top of this there is the oil boiler ban which is fair enough in urban areas where there alternative power supply.

    At present all I can think on doing is complaining to whom ever I can about the total impracticality of the insulating concrete floors and praying that my tenant does not come up with a reason to move on before 2028. At which point I will be forced to say to the tenant do you want to buy the property or not, because having spent significant money of the property in 2019 and just having recouped the cost I am not prepared to spend 10’s of thousands of pounds and risk the government wanting to upgrade the property to EPC ‘A’

    And the financial advisors say it’s about time in the market not timing in the case of property I am not so sure!
    Do you know if I was to put solar panels on the roof if I could charge the tenant for the electricity generated?

    • I produced EPCs for 14 years and I was also an Energy Advisor. In the latter role one of the tasks was to compare the EPC’s predicted energy usage with the actual usage experienced by the property’s occupants. In most circumstances the two figures were remarkably close together. When assessing the accuracy of the EPC always bear in mind the EPC is only looking at space heating, hot water provision and lighting and not energy supplied for other domestic purposes. Where EPCs they differed markedly from the occupier’s experience there was usually a obvious reason examples being:
      A range cooker that did not also heat the water or contribute to the central heating (£70/m for an oil fired AGA).
      Inefficient fridges and freezers.
      Excessive use of baths and showers by comparison with the EPC standard model.

  20. My understanding is this is a private members’ bill, not a government one. So, unless adopted by the government (which is a possibility) is unlikely to get through the necessary parliamentary procedure and become law – which doesn’t mean EPC “reform” isn’t going to happen – but it would have been useful if this piece had acknowledged that rather than portray the bill as government policy (which will probably come in a later government bill). Truth is very little is known on detail or timing – but all the ingredients for a perfect storm with the abolition of s.21 (best guess April 2025). Factor in more uncertainty due to election and it’s anyone’s guess. The only thing (almost) certain is it will be bad news for landlords.

  21. Robert Brann, landlord, will the government bring this law into force, a lot of people have quite rightly said, a lot of tenants will be homeless, as the landlords will not want to pay tens of thousands to bring it up to “C” level, perhaps the government at date said, will reconsider, why does it not apply to ALL houses, the landlords are being targeted, I rent the house next door, it scraped in at E rating, the tenants are quite happy, with reasonable fuel bills, it has solid walls, but quite warm with a conbi boiler, I had it refurbished about 8 years ago, when I inherited it, was not aware or advised by builders of the law, the EPC inspector did not make me aware of the law of 2025. I did not receive documentation of this law,

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