Are your Properties Energy Efficient?

Are your properties energy efficient? 

From April 2020, all properties need an Energy Performance Certificate (EPC) of E or upwards or be able to show a valid exemption certificate. Failure to provide one or the other will result in the property being illegal to let out. The problem for landlords is that these measures are going to get tougher as we move from 2025 when a proposed increase is to D and the aim is C by 2030.

Since April 2019, landlords now have to pay up to £3500 (inclusive of VAT) and can only gain an exemption when they can prove that spending up to that amount will not improve the property rating to an E or over. This is likely to be policed and may require professional advice/reports and more than one quote to confirm the position.

What is driving the energy efficiency improvements? 

There are three main drivers that are sitting behind these measures:

1. Fuel poverty of many households who live in rented homes. Many tenants have just enough spare money to pay for heating and if a property is not energy efficient a lot of the costly energy will escape from the property and be wasted.
2. Improving the UK’s fuel security to stop us from being so dependent on imported energy, particularly fossil fuels.
3. Climate change. The government, who signed up to an international commitment to reduce carbon emissions by 80% from 1990 levels realised, with the Clean Growth Strategy, that we were missing our targets. MEES (Minimum Energy Efficiency Savings) is seen as a way to get the country back on track.

What are the EPC exemptions? 

There are five main exemptions that can qualify to go on the register:

• Consent exemption – if a landlord needs consent from another party in order to undertake the improvement, and this is refused, then the work has been prevented by a third party. This will have to be evidenced.
• Devaluation exemption – if the installation measure will actually devalue the property by over 5%. This will have to be evidenced.
• Wall insulation exemption – if the recommended insulation measure has a negative impact on the property; this will require a report from a property expert/surveyor. This mainly affects listed properties.
• If all of the recommended improvements have been made, where practical, and the property remains below an E.
• Suitable funding cannot be found.