Property Update: EPC Requirements

We regularly provide our clients with expert legal advice on a variety of property matters – including supporting both landlords and tenants with issues affecting them.

Here our Litigation & Dispute Resolution team, have provided some information regarding Energy Performance Certificates, and what is required for rental properties currently and potentially from 2025.

An Energy Performance Certificate (EPC) provides detailed information about your property’s energy efficiency and carbon dioxide emissions.

To obtain an EPC, an Energy Assessment Survey must be carried out at the property. A Domestic Energy Assessor performs an inspection to determine how energy efficient the building is, and what efficiency level could be obtained if improvements are made.

During the inspection the Domestic Energy Assessor will look at the following:

• Windows
• Roofs, walls and insulation
• Boilers and heating systems
• Renewable energy devices (solar panels, wind turbines and so on)
• Lighting
• Fireplaces
• Building measurements
• The age of a building (or its constituent parts if applicable)

Once an inspection has been carried out, the Domestic Energy Assessor will draft the certificate and grade it on a scale of A to G; A being the most efficient and G being the least. An EPC will contain recommendations about how to improve the efficiency of the property

In England all rented out property must have an EPC rating of E or higher.

An EPC is valid for 10 years from the date of assessment and can be used for multiple tenancies within that period. As per the Energy Performance of Buildings Regulations 2012, a rental property is only required to have a valid EPC when it is being marketed to new tenants; therefore, if an existing certificate expires during a tenancy, the landlord will have to obtain another EPC before listing the rental and signing an agreement with new tenants. Otherwise, the landlord is not in breach of the regulations.

What are the new EPC regulations?

New regulations are expected to come into force in 2025 which will require all rental properties to have an EPC rating of C or higher. These regulations will initially apply only to new tenancies and then they are expected to be extended to all tenancies by 2028.

What can landlords do to prepare for these changes?

The government has recommended a fabric first approach which means covering wall, loft and floor insulation initially, before installing smart meters. Energy performance investment is currently capped at £3,500 for landlords, but as a higher EPC rating requires a greater investment, the cap will rise to £10,000.

The government is estimating that the average cost of improvement to obtain an EPC of C or higher is likely to be around £4,700 per property. Landlords are being encouraged to apply for a Green Homes Grant which will cover at least two-thirds of the upgrade cost.

What are the consequences of failing to comply with the new rules?

There is a financial penalty for failing to procure a valid EPC at the start of a tenancy, currently £5,000, although likely to rise to £30,000 from 2025.

Landlords that do not comply with their obligations at the start of a tenancy face serious issues should it come to seeking possession, so best practice is to do the right thing at the outset.

We can provide expert legal support surrounding landlord and tenant issues, including leases and disputes – as well as providing commercial and residential property conveyancing. For more information, please click on the links provided, or contact us directly on 01603 620508 for a no-obligation chat.