EPC ratings
An Energy Performance Certificate (EPC) is an essential requirement for anyone trying to rent or sell a property. And so when Government talk of further changes to EPC ratings naturally this affects a large number of the population.
EPC certificates were introduced by the UK Government in 2007. The aim was to indicate the energy efficiency performance of a prospective house or flat. Of course, this is important to both tenants and buyers. It was hoped this would encourage UK housing to be more energy efficient. Today there is an EPC register that allows all homeowners to search for their own EPC certificate.
In 2018, new EPC rating rules were brought into law. This required that all privately rented property in England be above a certain standard of energy efficiency. This one change ended up costing many landlords thousands of pounds.
While the 2018 changes are already having onerous effects on rental property owners, proposed changes in 2025 look catrostrophic. Many landlords feel the proposed epc rating changes are just the latest nail in an on-going war against landlords.
What is an EPC rating?
An EPC, or Energy Performance Certificate is a report on a property showing its energy efficiency.
They are drawn up by accredited domestic energy assessors according to a Standard Assessment Procedure.
They check things like floor and wall insulation, potential drafts or heat escapes. Also included are windows, heating systems and even lighting.
How do you understand an EPC rating meaning?
Homes are given an EPC rating report with a score ranging from A to G. A ratings are given to the most efficient homes and G ratings to the least efficient properties.
How long is an EPC certificate valid for?
Once produced, an EPC certificate is valid for ten years. This is then found by carrying out a simple search online for the epc register and entering a property’s postcode.
Problems with EPC certificates
Not everyone believes that EPCs were well implemented. In 2020, the Telegraph reported that the energy sector considered them “not fit for purpose”. They argued that they focused on properties cost efficiency, at the cost of its environmental impact. Of particular concern was the fact they favoured gas over electricity.
When the EPC system was launched in 2007, using electricity to heat a home was less efficient than using gas. Nowadays due to modern technology and renewable energy sources, using electricity is deemed twice as environmentally friendly.
Following a UK Government call for evidence, less than 3% of respondents thought an EPC rating was fit for purpose. A September 2020 action plan set out plans to improve EPC meanings. These were followed up on in July 2022 when an update to the Standard Assessment Procedure, SAP 10.2 was brought into force. This corrected the energy efficiency rating of electric heating.
None-the-less, there are still concerns that the rules and assessments are flawed. A report by Hamptons Estate Agents, often found a substantial divergence of scores in individual flats in the same block or houses in the same street.
As these structures often have similar construction the fact they receive divergent epc ratings could show that the system is not very objective. And so the score your property would achieve would be somewhat random.
How do EPC ratings affect landlords now?
In 2018 legislation came into force requiring all newly let rental properties to have an EPC rating of E or better. This was extended to all pre-existing tenancies in April 2020.
Now landlords can be fined up to £5,000 per property if a property they rent out does not reach the minimum standard of “E”.
While exceptions are available, they only apply to landlords who can show that they have already spent £3,500 improving their properties energy efficiency, or if three qualified installers agree no improvements can be made for less than that amount.
In addition, these exceptions only last five years, before they must be renewed.
What’s changing about EPCs in 2026?
Following a consultation in December 2020, the UK government has announced plans to increase the minimum EPC rating from E to C. This will apply to all newly let rentals from 2025, and to existing rental agreements from 2028.
It is currently thought that the amount of money a landlord must invest into improving the energy efficiency of property before it can get an exemption will be increased to £10,000.
However, this number is still under consultation, and grants may be available to help out in some cases. In addition, the amount a landlord can be fined for failing to adhere to EPC rating rules will be also be increased, to £30,000.
Many property owners are worried as much of the UK’s housing stock was built in the first half of the 20th century, with a substantial number of British houses dating to even earlier than that. These older houses can be extremely difficult and expensive to bring up to modern energy efficiency standards.
Indeed, the English Housing Survey indicates that 18% of private rental property would require more than £10,000 to bring up to an EPC rating of C, while a further 6% would still not be brought up to a C standard with £15,000 of energy efficiency spending.
Data from the property website Rightmove further shows this problem, with the website estimating that 1.7 million homes will not be able to be improved beyond an EPC rating of D.
Landlors worry over using EPC checker in future
Landlords across the country are deeply concerned. The financial website This is Money said that a third of landlords are no longer confident their properties will reach government efficiency targets. Ths could effectively mean that works deemed necessary for an EPC for a rented property could become questionable.
The consumer website Which.co.uk adds that, according to a survey of buy-to let investors from Paragon Bank, more than one in five landlords could sell up over the need for a new EPC test in the future.
If you need to sell a property quickly contact one of our experts or request a free offer via our website. Our experienced team will be on hand to answer any questions you may have.
Has this article been helpful? Let us know by leaving a short comment below.
If the let property is not cost effective to raise to EPC level of C how is one placed to terminate the tenancy.
Hi Hill and thank you for your question.
As long as your property is outside of Scotland you are still able to simply serve your tenants with two months notice to vacate the property via a ‘Section 21 Notice’. This is provided the tenancy is both held an Assured Shorthold Tenancy (AST) and has run into the ‘Periodic’ term i.e. the initial ‘Fixed Term’ period has ended which will have typically been set as 6 or 12 months from the outset. You do not have to give any reason for having served the Section 21 Notice but we would suggest you do let your tenants know you are planning to sell as they may be interested in buying the property which could make things a lot easier in terms of the sale as they will not need to pack and leave and you could also save on estate agent fees. We hope this helps.
Where are they going to go if lanlords are selling up but they can’t afford a mortgage????
Hi Steve and thank you for your question.
Whilst there is some merit in moving forward with plans to become a ‘greener’ society, unfortunately this will come at a relatively high cost as the UK Government plans to get more properties into owner occupation. The only issue with this is that borrowing costs continue to rise at present with the Bank of England interest base rate now being at an all time 14 year high and so your guess is as good as ours.
I’m simply looking for a new home! I’ve found a lovely little flat but I’m very hesitant to buy it as it has an EPC E. It needs wall insulation, but as it’s small I can’t have that done internally as it’s only 31 sq meters as it is. It also is a top flat with a flat roof.
I would live in this flat myself, but I’m aware that I could find it difficult to sell in a few years because of the EPC, so unattractive to landlords. But, if I have internal wall insulation it will reduce the floor area to under 30 sq m’ Any thoughts are welcome – maybe I should just rent?
Hi Nell and thank you for your question. When it comes to questions of insulation and any potential energy saving it can be hard to accurately calculate the beneifts of going ahead with this.
You may find the following posts from the BBC and Energy Saving Trust helpful:
https://www.bbc.co.uk/bitesize/guides/zr7j382/revision/5
https://energysavingtrust.org.uk/energy-at-home/reducing-home-heat-loss/
We hope these help in some way.