Landlords: make sure your EPC doesn't let you down

What is an Energy Performance Certificate?

An Energy Performance Certificate, also known as an EPC is a document which rates a properties’ energy efficiency on a scale of A to G, with A as the most efficient. As of 01 April 2018, it has been declared unlawful to let residential or business premises in England and Wales which achieve an Energy Performance Certificate (EPC) rating below Grade E.

In March 2023, the government set targets for all rental properties in England and Wales to have an EPC rating of C or better by 2028. The penalty for not complying to these regulations has also been increased from £5,000 to £30,000. 

Considering the building’s age

While it might be the case that the older the building the more likely it is that it would be below the MEES regulations, it does not necessarily follow that because it was built, say, post-1980 or even in the 1990s that it will meet the minimum E level of energy performance. Nothing should be taken for granted when property is an income or investment asset.

Why is it important to have a recent EPC?

Landlords not in possession of an up-to-date EPC are advised to obtain an assessment in good time. The more supporting information a landlord is able to make available to an accredited energy assessor, the more informed – and so more accurate – the EPC produced will be.

If information on the lighting, insulation and heating systems etc is not supplied the assessor will make assumptions based on the default values in the official energy rating methodology and guidance. This can lead to wide variations between virtually identical buildings simply due to the availability of information or otherwise.

Is it possible to challenge the EPC regulations?

If you are a landlord whose rental property portfolio interests only have Listed Building designation or you are confident you can make a compelling case that improvements to increase the energy performance of your property to meet the mandatory EPC Grade E would devalue the property, then you have no need to read further.

Understanding Minimum Energy Efficiency Standards

The Minimum Energy Efficiency Standards (MEES) are a set of regulations applying to rental homes. These were introduced in 2015, following from the earlier Energy Act passed in parliament in 2011.As of 2015, MEES confirmed that properties with an EPC rating of F or G are considered substandard and will be regarded as unlawful to let in 12 months’ time.

By the time of enforcement, there will have been seven years notice of the need for compliance with the MEES regulations. Yet in our experience in our regional patch, there remains a significant number of properties where commercial landlords with business premises have not obtained EPCs.

In all likelihood this is because these landlords have been fortunate enough to have retained tenants in-situ for a long period because, with a few narrow exceptions, from October 2008 all commercial premises have been required to have an EPC by an accredited assessor at the point letting, sale or completed construction. In fact, for a number of years, property agents have had to comply with the ruling that an EPC rating must be included at the point of marketing or advertising any built property to let or for sale.

Using Pre-Assessment Surveys

Where a property is suspected of having a low EPC rating it would also be worthwhile for commercial property landlords to seek a pre-assessment survey. Qualified building surveyors can advise about energy saving methods, maintenance and works such as installation of controls to heating and hot water systems, replacement lighting, refitting or replacement windows or other low or zero carbon technologies.

Support with EPC Ratings

If you are a landlord and have concerns over your properties’ EPC ratings in light of these regulations, contact our expert team today who can provide advice on the best solution to ensure your building remains compliant.