How does the EPC U-turn impact landlords?
21 Sep 2023
In a surprise move this week, the UK government announced a U-turn on its plans to require landlords to upgrade the energy efficiency of their rental properties to a minimum Energy Performance Certificate (EPC) rating of C by 2025 and 2028.
This decision has been met with mixed reactions. Some have welcomed it, arguing that it will help to ease the cost of living crisis for landlords and tenants alike. Others have criticised it, saying that it will delay the UK's progress towards its net zero targets and make it more difficult to achieve energy security.
What are the reasons for the U-turn?
The government has given a number of reasons for its decision to scrap the EPC requirements. One reason is that it estimates the cost of upgrading all rental properties to a C rating to be around £13 billion. This cost would ultimately be put on tenants in the form of higher rent.
Another reason is that the government is concerned about the impact of the EPC requirements on landlords. It believes that the requirements could lead to some landlords selling their properties, which would reduce the supply of rental housing and push up rents even further.
The government has also said that it wants to take a more "pragmatic" approach to improving energy efficiency in the private rented sector. It argues that the EPC requirements were too rigid and did not take into account the different circumstances of landlords and tenants.
What does this U-turn mean for you?
If you are a landlord, the U-turn means that you are no longer legally required to upgrade the energy efficiency of your rental properties. However, the government has said that it will still encourage landlords to make improvements, and it is offering a number of financial incentives to do so.
If you are a tenant, the U-turn means that your landlord is no longer required to spend money on upgrading the energy efficiency of your property. However, some landlords may still choose to do so, in order to make their properties more attractive to tenants and to reduce their energy bills.
What should you do next?
If you are a landlord, you should carefully consider whether to upgrade the energy efficiency of your rental properties. There are a number of factors to take into account, such as the age and condition of your properties, the type of tenants you have, and the cost of improvements.
What will the Government do under the revised plans?
- Encourage landlords to upgrade the energy efficiency of their properties where they can, but scrap the policies that force them to do so.
- Raise the grant for upgrading boilers to low-carbon alternatives to £7,500, a 50% increase, to assist households.
- Extend the deadline to ban oil, LPG, and coal heating for off-gas-grid homes from 2026 to 2035 to avoid expensive upgrades costing homeowners £10-15,000 within three years, as many homes are not compatible with heat pumps.
- Set exemptions to the planned 2035 phase-out of fossil fuel boilers, including gas, assisting those who will struggle the most to make the switch to low-carbon alternatives. This is expected to cover around a fifth of homes, including off-gas-grid homes, where the cost of retrofitting will be too high a price to pay.
The UK government's recent U-turn on EPC requirements is a significant development. It is unclear what the long-term impact of this decision will be, but it is likely to have a major impact on the private rented sector.
If you have any questions or would like to start looking at ways to improve the energy efficiency of your property, you can get in touch with our team at 01482 562 562 📞
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