Carter Jonas
Carter Jonas

EPCs 10 years on – time to reassess their impact?

It’s 10 years since residential properties in the UK were first required to have an Energy Performance Certificate (EPC), to last for a decade, before they could be sold or let – the anniversary also means the time has come for the early starters to be reassessed.

At first regarded as a piece of bureaucracy, the EPC gained more serious implication when Minimum Energy Efficiency Standards (MEES) meant that from April 2018 it will be difficult to let a property with an Energy Efficiency Standard on the EPC below Band E. There are exemptions that can be registered but these are subject to re-application every five years and it is by no means certain that this will continue ad infinitum. Indeed, it’s expected that the rules will become tougher and eventually exclude Band E properties.

With that in mind, it could be beneficial to review the EPC for your property even if you are not yet required to replace the original undertaken 10 years ago.

The energy assessor who provides the EPC will check for items such as double glazing, boiler efficiency, radiators, and insulation for the hot water tank, walls, and loft. The results are fed into a software program that produces a figure for the EPC which in turn determines the banding in some instances. The assessor can override the program if there’s visual or written evidence that standards are higher than the software calculate.

Where you are borrowing to fund the purchase of a lettings property, your lender may want confirmation of the property’s energy efficiency standards going forward, especially where the current banding could make it borderline in the future and therefore bring a possible diminution in its asset value as a lettings property. So taking care over what was once regarded as a merely administrative necessity could pay dividends.

Certain classes of building are exempt from the need for an EPC. As far as residential landlords are concerned, the principal category concerns those that are officially listed as of historic interest.

From April this year, tenants also have the right to ask their landlords to approve energy efficiency measures. Originally this would have been under the Green Deal before its funding was withdrawn because of low take-up.

Improvements were supposed to funded through the energy bills applicable to the property provided the benefits of the improvement outweighed the cost of making them.

But it’s much better to make these improvements yourself as an investment in your let property rather than use any scheme involving the tenant paying which may ultimately restrict which energy company tenants can use in the future as not all energy providers are involved. While this may seem insignificant, consumers are growing more energy aware and may resent having their opportunities to switch curtailed.

Lisa SimonMARLA

Partner - Head of National Residential Lettings

Lisa is the head of Residential Lettings at Carter Jonas. Lisa is based in our Mayfair office and advises on all aspects of letting and managing property. Lisa resides in West London with her hu...

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