The government has told landlords that it will give an update on minimum Energy Performance Certificate (EPC) scores before Christmas, sending shockwaves through the private rented sector.
As things stand, it’s expected that landlords will have to bring their properties up to at least EPC C for new tenancies from 1 April 2025. For existing tenancies, landlords will have to upgrade their properties by 2028.
But to date, the government has not turned this provisional timetable into law, so if it did so now, landlords would have just 18 months to bring their properties up to standard. That would be a big ask: according to the most recent English Housing Survey, 53% of privately rented homes have an EPC rating of D or below.
The government has also estimated that 46% of properties would cost between £5,000 and £10,000 to renovate, while 30% would cost under £5,000, and 24% would cost more than £10,000. With mortgage costs and other expenses rising, that would be challenging for many – especially in areas where rents are lower and works would take longer to pay off.
Some have predicted that landlords could be exempted from the minimum EPC if it would cost more than £10,000 to achieve. Earlier this year, it was also rumoured that the government could push the deadline for existing tenancies back to 2028. Until politicians set a clear timetable, the uncertainty will continue – and unless they give landlords enough time to make upgrades and limit their costs through exemptions or grants, they risk driving many out of the market.
Do EPCs measure the right thing?
While the government tries to get landlords to improve their EPC scores, there’s increasing concern that they are no longer fit for purpose.
EPCs measure how much energy a property uses, and how much it loses due to inefficiencies like poor insulation. However, homes with excellent EPC ratings that stay warm in winter can easily get too hot in the warmer months. Last year, a report by the Climate Change Commission found that 55% of UK homes have at least one bedroom that overheats in summer. Adding insulation and triple glazing could make that worse if not accompanied by cooling upgrades like shutters and ceiling fans, but these won’t improve an EPC score.
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BTL landlords target higher EPC rated properties ahead of legislation changes – Property Industry Eye