Some 78% of landlords have now heard about government plans around EPC ratings, however, many landlords, while aware of the rules, confess to not knowing a lot about the proposals, according to new research from Shawbrook.
The research also showed that 73% of landlords have agreed that the government has done a poor job at communicating the proposed EPC changes.
Shawbrook’s research comes following the Autumn Statement where the chancellor Jeremy Hunt reaffirmed the government’s commitment to net zero with a proposal to reduce energy consumption from buildings and industry by 15% by 2030.
Hunt has revealed that government will be doubling funding to improve the energy efficiency of buildings and industry to achieve the target, adding another £6bn from 2025.
While landlords are currently able to let homes which have an EPC rating of E and above, the government standards are widely expected to become tougher. The government has previously set out an aspiration for a minimum C rating in England and Wales by April 2025. Future legislation could see landlords unable to take on new tenants or face fines if they fail to comply with the changes.
A lack of information appeared to be a key issue for landlords looking to comply with EPC changes with 31% citing it as a barrier for them in improving the EPC ratings of their properties. Ultimately, 68% of landlords agree that there isn’t enough support for them to make improvements.
The research, part of Shawbrook’s Confronting the EPC Challenge report, highlights the role that both lenders and brokers can play in supporting landlords with creating a more sustainable property portfolio. The research shows that 56% of landlords have now spoken to either a lender or broker about the expected EPC proposals. But four in ten still have not addressed the proposals with either their lender or broker.
Emma Cox, MD of Real Estate at Shawbrook, commented: “Landlords are already grappling with a volatile housing market so it’s vital that they are planning ahead where possible. The government has made clear its aspirations for net zero buildings and every homeowner and property investor in the UK will have a role to play in getting us to this goal. However, while many landlords have done their homework and know of the current EPC proposals there is still a huge amount of uncertainty.
“While some in the industry are waiting for a confirmation from the government or direction on the timings of the proposals, others are already taking action to make their properties more sustainable. “The fear is with materials and service costs going up, improvement work could become increasingly expensive as the proposed 2025 deadline comes closer.”
“While landlords are currently able to let homes which have an EPC rating of D and above”
– Do you mean E and above?
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Thanks Ben. It was a typo. Now amended.
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Band C will never be achievable for many older properties and I cannot believe government doesn’t know this.
If the work will cost more than £3,500 to get the desired rating, currently the property is exempt and can be rented even with a ‘G Band’. The landlord has only to register the exemption, on the exemption register and have the necessary documentary proof to support.
Here is a classic example of a stone built rural cottage that is a ‘Band G score 1’ that the EPC advised about costs. The only good score was 100% low energy lighting!
Typical installation cost:
1. Internal or external wall insulation £4,000 – £14,000 with saving of £1,376
2. Floor insulation (solid floor) £4,000 – £6,000 with saving of £124
3. High heat retention storage heaters £2,000 – £3,000 with a saving £348 (This alone moved it to a band F, just!)
4. Solar water heating £4,000 – £6,000 with saving £96
5. Replace single glazed windows with low-E double glazed windows £3,300 – £6,500 with a saving £197
6. Solar photovoltaic panels £3,500 – £5,500 with a saving £394
7. Wind turbine £15,000 – £25,000 with a saving £778.
If all the work was undertaken the cost by governments own figures is low end £35,800 to £66,000 outlay for the landlord, for an annual ‘potential’ fuel bill saving of £3,313 for the tenant.
Remember the EPC advises:
By following our step by step recommendations you could reduce this property’s energy use and potentially save money. Carrying out these changes in order will improve the property’s energy rating.
As far as saving the planet is concerned if everything was done ………. This property’s current environmental impact rating is G. It has the potential to be C.
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Until the reliability of the EPC is fixed then increasing the requirements is a waste of time.
I have a client who had three incredibly economical houses built just a few years ago:
It had thermodynamic plaster board, Triple glazing, air source heat pump amongst a host of other recommended efficiency measures. In fact it was conditional of the planning that it had to be very economical.
The EPC gave it a rating of E, which the assessor could only explain was due to the living space being on the top floor and bedrooms on the ground floor.
Short of adding a wind turbine on the roof (in the middle of a historic town) there is literally nothing they could improve upon.
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