With changes to EPC standards on the horizon, and a combined 79.92% of UK renters either concerned (33.27%) or strongly concerned (46.65%) about their gas and/or electric costs - it's no surprise that half of UK landlords are looking to make the necessary improvements.
A new survey of over 1,00 UK renters by property bridging finance broker, Finbri, highlighted that the greatest concern for renters currently is their energy costs. Their survey of 1,001 landlords revealed the extent of preparation landlords are undertaking, with 48.05% saying they intend to complete improvement-related works over the next 12 months to comply with EPC requirements.
24.08% of landlords aren't sure if they will complete EPC improvement-related works to their investment properties in the next 12 months, with just 27.87% of landlords currently don't intend to complete energy performance improvements.
The growing importance of the EPC rating, mainly due to government changes and energy prices coming to the forefront of issues faced by renters, has increased the need to make energy improvements to properties.
In order to comply with the new regulations, landlords should:
Check their current EPC rating and make improvements where necessary
Understand the legal requirements and what works are necessary
Use an accredited energy assessor to carry out an EPC assessment
Ensure that all improvements are completed in a timely manner
What are the EPC guidelines currently in effect and what can be anticipated?
An EPC is a home energy performance grade that shows you how energy efficient your property is and includes a list of recommendations for improving your energy efficiency. It's a legal requirement to have an EPC if you're renting a property.
An EPC will give your property an energy rating from A (very efficient) to G (inefficient) and is valid for 10 years.
As of now, a residence must have an EPC rating in order to be rented out. But only if the building was built before April 1 2018, is this necessary. For structures built after this date, the minimum standard is D.
All privately rented residences in England and Wales must comply with the government's MEES, which calls for an EPC rating of at least E, starting in April 2023.
How can a good EPC rating benefit landlords & tenants?
Lower energy bills - adding more energy-efficient measures to your home will lower your consumption and therefore reduce tenants' energy bills. As current energy costs have 78.62% of UK renters Strongly concerned (39.76%) or Concerned (38.86%), these improvements and lower energy bills will be a relief for tenants.
Improve property value - if you're considering selling your property, then improving the energy rating will also likely improve the value. As of March 2023, 41% of estate agents reported that sellers are attaching a price premium to their home if it has a high energy efficiency rating.
Lower mortgage - cheaper rates and even cashback offers are available on mortgages for those with “green homes”.
Lower your carbon footprint - increasing your property's energy efficiency will lower your carbon emissions.
What improvements can be made to increase the EPC rating?
There are many improvements that can be made to a property to increase its EPC rating and thereby lower energy costs, such as:
Loft insulation
Wall insulation
Replace the boiler
Solar panels
Double glazing
Secondary heating source
By making the necessary improvements, landlords can ensure their properties comply with the regulations and are more energy efficient. This not only benefits tenants but also helps landlords save money on their energy bills, as well as having a positive impact on the environment.
Final thoughts
The Finbri survey has highlighted the importance of energy costs for tenants and landlords are taking the necessary steps to ensure their properties are up to the required standards. With the impending changes to EPC ratings, it's essential for landlords to understand the legal requirements and make any necessary improvements in a timely manner. This will ensure that their properties meet the regulations and are more energy efficient, benefiting tenants and landlords.
Stephen Clark, from Finbri, comments: “Landlords are being motivated to ensure their properties meet the new energy performance requirements with both a carrot and a stick. The carrot - landlords that have better energy-performing properties are likely to experience increased demand by would-be tenants; the stick - the possibility of a hefty fine for non-compliance with the new EPC standard.
"Whilst this may appear to address tenants' concerns about minimising energy costs, it's possible that landlords will choose to offset the cost of making necessary property improvements with increased rents.”
