Last month, Housing Secretary Michael Gove declared the Government was “asking too much, too quickly” of landlords by setting a 2028 deadline for private rented homes to reach an EPC band C.
The deadline had been mooted in a policy consultation back in 2021. It has hung over landlords’ heads ever since, with little clarity or certainty on offer, so Gove’s latest comments sparked yet another debate about ‘will they, won’t they’, and even the value of EPCs in the first place.
Whatever the Government’s decision, there are pros and cons for landlords.
If Gove kicks the EPC C deadline into the long grass and delays the required improvements, I can’t help but feel it’s a temporary reprieve which simply triggers a gradual spiral of decline. A recent report estimates tenants will have to foot an additional £1.4bn in energy bills. And arguably that means, in the face of consistently high energy bills from inefficient homes, tenant finances will be squeezed further, rent arrears are likely to increase, and landlords will lose the income they need to pay for the upgrades which will still be required eventually.
Some landlords might feel reassured that the Government does not want to “overburden” landlords with the costs of improvements at a time of high inflation, but I can see no indication that retrofit costs are going to get that much cheaper in the future anyway.
Alternatively, if the Government sticks to the 2028 deadline, obviously landlords will need to improve their properties up to an EPC band C and fork out for energy efficiency improvements over the next five years.
For those landlords with ‘hard to treat’ low-rated properties, they would still be very likely to benefit from exemptions. But for others, the costs could be significant and often go on unglamorous fabric insulation measures which cannot be seen or marketed very easily.
For landlords who can afford to make the improvements now, the likely financial benefits include easier access to funding by ESG-conscious banks and other investors, a perceived higher-value portfolio of properties, and a more secure income stream from tenants who are not battling fuel poverty. And there are grant schemes available to help too, including the Boiler Upgrade Scheme and the forthcoming Great British Insulation Scheme.
But with over a third of a million landlords apparently already thinking of quitting the private rental sector, the Government’s EPC decision could lead also to a faster exodus, adding to rented housing shortages in vital constituencies.
So ultimately, the Government will have to choose its priorities regarding housing and net zero, and will need to judge public sentiment on these issues.
From my point of view, what is needed urgently is certainty. In my experience, most landlords will do what is necessary to comply with new standards. But they need absolute clarity on the deadline for making energy efficiency improvements to EPC band C, clarity at a policy level on how our housing stock reaches carbon net zero, and clarity on the level of monetary support they will receive for making energy efficiency improvements.
And to support landlords in making their properties more energy efficient for tenants, we must ensure that EPCs themselves provide a true picture of energy performance – something we don’t have at the moment. The industry still awaits the delivery of the EPC Action Plan in England which is designed to improve the quality of EPCs. However, this is held up by the Energy Bill which currently sits in the House of Commons.
It is vital we revamp the EPC to support landlords in making the right improvements to meet EPC band C. Then, whenever the deadline turns out to be, at least we know we are doing a good job and all this waiting will have been worthwhile.
* Stuart Fairlie is managing director of Elmhurst Energy *
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The EPC Action Plan for England - to improve EPC quality- is news to me. Improvements would be welcome, but we still have to wait for the outcome.
Hope "the forthcoming Great British Insulation Scheme" isn't the screw-up that the last few Government attempts at schemes have been (those commencing with Cameron's Green New Deal).
Article is wrong to say: "unglamorous fabric insulation measures which cannot be seen or marketed very easily". These should be reflected in the EPC grade, required information to give prospective tenants. In adverts, I point out that my EPC Grade Cs are better than the national average of Grade D (pretty certain this is for all tenures, including owner occupied-. When doing viewings I explain that the cavity wall insulation makes the place warmer in Winter and cooler in Summer. Plus the white painted external render and cross-ventilation availability (due to window positions and layout) will help alleviate summer overheating - its not just about winter cold down-South.
as someone who has new build flats but as they have electric central heating they are d rated. the property meets all other efficieny requirements and the tenants are using a green energy supplier. At the moment i am considering selling and give notice to 10 households in an area where there is at this morning there are 22 properties available to rent on Rightmove . My dilemna
No Dilemma for me, if you cannot get them easily to a C, and we think C will come in eventually….. Sell the lot. 💰🎉
My new build apartment had a 12kw electric boiler supplying radiators in each room and only one controller, so all on or all off, apart from the wildly inaccurate thermostatic valves on each rad. I ripped it all out and installed individual electric radiators with independent and accurate electronic controls on each one. so you can choose what you want on and what you want off. It was done for less than £1k with the basic individual time and temperature controllers fitted. The EPC rating was upgraded from D to B as a result. 10 years on the electric radiators are working fine and have required no maintenance. As I now live there myself, I decided to improve again this year and gave the electric radiators to a grateful neighbour who will do what I did and then I upgraded my apartment to a higher specification system with a closer controlled type of electric radiator. Now my new radiators will individually turn on or off on a timer, or turn on or off if the room is occupied or vacant and even turns off if an open window or door is detected. All in cost under £1.4k, for a very sophisticated low running cost system in a large 1 bed apartment.
I'm a chartered surveyor, commercial property landlord and domestic property landlord. EPCs are MOST CERTAINLY 'fit for purpose', it's the energy wasteful housing stock (mostly PRS) that is not fit for purpose. It's now widely reported that more than 25% of families in the PRS live in sub-human fuel poverty because their landlords have chosen not to insulate the walls, loft and roof of these units. The Carbonlaces 'research' has been comprehensively picked apart by the professional surveying community. Anyone with any critical intelligence realises that an ACTUAL tenant in an EPC Grade G flat would be using 344% LESS energy than the EPC assumes because an EPC is an ASSET RATING - it has been for 15 years and this is the correct methodology. An ASSET rating assumes that the tenant heats every room to 20 degrees all winter. Of course if you are in a shockingly energy wasteful Grade G flat only a millionaire could afford to heat the whole flat correctly. So what happens? These tenants UNDER HEAT their families by 344% every winter. At most they heat one room and normally they cannot afford to heat even that because the property has NO insulation. The energy assessors I use for my properties are highly professional, attend regular training up-dates, and are routinely & thoroughly audited by the Government. As with any measurement its more accurate if the building owner provides data on their building to the energy assessor. Just like a check-up with a Doctor is more accurate if you talk to the Doctor and provide him with some information.
The robust EPC system for commercial rental buildings has been tried and tested for years. That's why there are more then 1 million commercial EPCs on the public database. That's why they are used and relied on by every UK bank for loan security purpose. That's why they are used by RICS Registered Valuers for valuation reports. It's a national system that's working and is the envy of the rest of the world.
The 21 million domestic EPCs and the Tory's super simple and effective Minimum Energy Efficiency Standard (MEES) means that not a single energy wasteful EPC Grade F or G house, flat or commercial unit has been let to a new tenant since 2018. EPCs and MEES are working, the numbers don't lie. That's why good, forward thinking landlords have been installing LED, electric heat pumps and insulation for YEARS. It's the moaning landlords who have failed to invest in making their product fit-for-purpose that are now getting all upset.
We now need to change the main EPC Grade on domestic EPCs to report the CO2 pollution figures as the main coloured graph. This data is already reported half way down the EPC certificate so it just needs to be bought to the top of the EPC. Very simple. This is how's it's been for commercial EPCs for the last 15 years. This would then encourage landlords to install intelligent, efficient electric heating systems in conjunction with insulation to walls, loft and roof. That's what our UK housing stock desperately needs. EPCs are an excellent national measurement system and folk need to focus on making their buildings better rather than trying to find a scapegoat.
Wow 🫤that was a long one…. Not read of course because it’s guaranteed to be nonsense 😂😂
Agree with the need to insulate etc. to future-proof properties and help tenants not waste energy/money.
BUT I've found the current EPC system has some perverse results: just crazy. So can't agree they "are an excellent national measurement system". And some of the recommendations for improvements ...
EPCs are a complete nonsense when 2 different assessors will come up with wildly differing results up to 20 points apart for the same property.
A thick, technophobe tenant who doesn't engage with the heating programmer will use vastly more energy than someone who engages with the programmer.
Absolute rubbish. EPC's are not fit for purpose. Why would a professional who spent years qualifying championing certificates issued by operatives who may have been butchers yesterday but took a 2 day training course on how to write up an EPC.
To quote:- Yesterday I could not spell EPC assessor, and now I is one, sums up the technical knowledge required. I currently live in an apartment block with apartments ofv identical construction, over 200 of them. The EPC's for each apartment vary from B to D. Please tell me how that works if EPC's are supposed to be accurate.
Martin my friend you should know better with your dodge EPC as if our bit makes a difference to the environment.
How about one Cows emissions in more ways than one over a year equal to a car doing 33k kilometres.
I am sure you can do to mats, so it’s not all about EPC’s saving the environment, don’t mention wars banging away.
Maybe change the Cow instead of the car.
Can't see the delay in the EPC-C requirement will be for long.
If Labour get in at the next election they'll probably implement it.
IF the Tories get in again, they can go ahead anyway with the election after that being a few years away.
Gove's announcement is probably just to make the Government look a little better, following their surprise win in the by-election in Boris's old constituency.
Might be he realises he's negged-off the PRS with the RR Bill, but doubt that much thought has gone into it.
My name is Martin gibbons blah blah blah blah blah blah blah blah. You know it makes sense
What will it take for websites like Rightmove and local letting agents to market energy performance? The argument for them doing this is that it drives value into the sector, which landlords can use as a signal about tenant demand for energy efficient properties. A buried reference to an EPC rating in an ad is not going to bring this issue alive.
I believe a good approach to this would be any improvements needed to be cost effective and should have a reasonable pay back time.
Also any Boilers supplied under a Grant Scheme should have a 10 Tear Guarantee .
I pay for the bills in over 100 HMOs and EPC rating makes no difference. I have fitted insulation A rated, boilers LED bulbs and it makes no difference to the energy used. Yes, insulation and double glazing makes the property more comfortable, soundproof and reduces mould. As for reducing the amount of energy used, it makes no difference. Do not get me wrong I’d like to save money and the planet. Before you fit a a rated boiler, check the energy use before and after and you’ll find they makes no difference so how can they be 40% more efficient. So how do you explain this Martin?
There is something seriously wrong with the current measuring system.
Jim HaliburtonTheHMODaddy
The things that make the most noticeable difference to HMO bills are LED light bulbs, good heating programmers and solar panels especially if combined with a hot water diverter or battery.
Here is my overall estimation of what the Government want to happen, but will never say it. They want properties to be as energy efficient as possible, we get that. One underlying factor as to why, is that they expect people to still be paying roughly the same direct debit now as they would when the property was not to a higher 'energy rating'. Meaning that in the warmer months of the year when most energy customers are paying the same direct debit they did in the colder months, it leaves the energy providers with...credit. That said credit can be used to bank roll green initiatives that energy providers churn out. Such as electric charging stations, wind turbines, solar farms etc.
Just have a look how much credit UK customers were in at the end of the winter just gone. You would expect it to be very low considering the cost of living crisis discussed every two minutes. In fact, UK customers at the end of last winter collectively had billions of pounds worth of credit built up. Look how much energy providers push direct debits onto people now, albeit under the premise that they are 'looking out for you' and 'don’t want you to slip into debt'
Energy suppliers/ providers need your credit. If you pay the exact amount you owe, it means they will have to start cutting into their profit margins to fund these new green plans.
Energy efficient homes, means lower energy bills. This does lead to a bit more financial freedom. However, nowhere near enough to seriously look into changing direct debits if energy prices stay similar to how they are now for the long haul.
The Government don't want to fund green initiatives themself, they want the private sector to deal with that problem. In the end of all this, who pays for all these green energy plans...the customers.
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