Since 2008, landlords have been required to provide Energy Performance Certificates (EPCs) for rental properties, but the regulations have changed in recent years. Now, it’s not enough to supply an EPC to prospective tenants, the rating needs to meet Minimum Energy Efficiency Standards, and failure to comply could result in a fine of thousands.
The pressure on all of us to do more to be energy-efficient isn’t subsiding any time soon, and landlords are no exception. Luckily, there are ways to make positive changes to rental properties that will not only create a more aesthetically pleasing property for tenants but also make the home eco-friendly and sustainable.
What is an EPC and why are they needed?
Energy Performance Certificates are ratings that measure how energy efficient a property is. They are required for all rental properties in the UK and the minimum standards for EPC ratings are increasing.
An EPC rates a property based on how much gas and electricity is estimated to be used for heating, lighting and hot water, giving it a score on a scale of A to G, with ‘A’ the most efficient and ‘G’ the least efficient. As EPC requirements rise, landlords need to upgrade their properties to make other environmentally-friendly changes. While the improvements may require initial investments, upgrading to higher EPC standards will benefit both landlords and tenants in the long run through lower energy bills and a higher quality, more attractive rental property.
For landlords, now is the time to evaluate your properties’ EPC ratings and make a plan to improve them to at least a ‘C’ rating and beyond. There are funding schemes available to help subsidise the cost of some energy efficiency upgrades. With the minimum EPC standards for rentals poised to increase again in a few years, improving your properties’ ratings today will help future-proof your investments and ensure you’re fully compliant with the necessary regulations. Higher energy performance is advantageous for all in the drive toward more sustainable and eco-friendly living, and EPC ratings are one step towards that.
When does the EPC apply?
In England and Wales, around 6% of properties still have an EPC of ‘F’ or ‘G’. So, the new regulations around minimum EPC standards apply to most residential properties in the private rental sector in England and Wales. Specifically, the rules cover any private domestic rental property let on a lease between six months to 99 years in length. While similar EPC legislation exists in Scotland, the requirements in England and Wales are enforced separately.
However, there are a few exemptions from the regulations in select cases. Landlords can register for an official exemption through the PRS Exemptions Register if one of the following applies:
- Required upgrades would significantly damage the property or decrease its value by more than 5%.
- Obtaining consent for necessary improvements is not possible from tenants, lenders or head landlords.
- The identified efficiency measures are not cost-effective based either on a seven-year payback period or under the Green Deal’s Golden Rule.
While exemptions will only apply to a small number of cases, the new rules aim to substantially improve the energy efficiency and sustainability of homes in the UK private rental sector overall. Landlords should evaluate if their properties comply with minimum EPC standards and make any necessary upgrades or apply for exemptions as soon as possible to avoid legal consequences.
What are the new EPC guidelines?
In December 2020, the government announced changes to the Minimum Energy Efficiency Standards in England and Wales which means that all rental properties will now need an EPC rating of ‘C’ or above by 2028. The changes are intended to enhance energy efficiency in properties and minimise carbon emissions to help meet the UK’s 2050 net-zero targets. What’s more, landlords who fail to raise the EPC rating of their properties by the deadline face even higher fines of up to £30,000.
MEES guidelines highlight that landlords are expected to make changes immediately to bring up the EPC rating of their properties, and the changes required will vary from property to property. A new home may not need as much work as a fixer-upper that needs more renovations and upgrades to make it energy-efficient. Budget will also vary from owner to owner, which may impact the types of changes that can be made.
Upgrades that will improve EPC ratings
Insulate to prevent heat loss
A large portion of heat loss in properties, up to 35%, occurs through exterior walls. For most homes with lower EPC ratings, the walls likely have little to no insulation. Adding wall insulation is an effective way for landlords to significantly improve a property’s energy efficiency and EPC score. However, the chosen insulation method impacts both cost and the level of disruption for tenants, so thorough research is essential.
Insulating plasterboard is typically the best option to minimise tenant disruption while keeping rooms the same size. It is highly effective at decreasing heat loss through walls and allows original fittings like window sills and radiators to remain in place without needing relocation. The plasterboard is installed over existing walls and provides a layer of insulation without requiring the space to be emptied. It can improve a wall’s thermal performance by up to 60% depending on its thickness.
Cavity wall insulation is another good choice if the exterior walls have a gap between internal and external layers. The gap is filled with insulating material to curb heat flow between the wall layers. For solid walls without a cavity, external wall insulation involves applying insulating panels to the outside of the property and then covering them with protective render or cladding.
It is also important for landlords to consider insulating any adjoining buildings such as garages which can contribute to heat loss in connected rooms. Overall, adding insulation to exterior walls is one of the most significant measures that can be taken to raise a low EPC rating. The investment in energy efficiency will benefit both tenants through improved comfort and lower energy costs, as well as landlords through higher property value and sustainability.
Opt for single-glazed windows
Older properties often still feature single-glazed windows which allow substantial heat loss and drafts. Upgrading windows is one of the most significant improvements landlords can make to raise an EPC rating and should be prioritised before other changes. There is little value in investing in insulation, heating systems or other efficiency measures if the windows are neglected, as the benefits will essentially be lost.
Replacing single-glazed windows with double or triple-glazed alternatives can increase a property’s EPC score by up to 10 points while also enhancing security for tenants. Both provide far better insulation than single glazing, which not only reduces heat transfer through the windows by up to 60-70% but it also minimises outside noise pollution entering the home.
While the initial installation costs for new windows may seem high, the long-term benefits to tenants in improved comfort and lower energy bills, as well as to landlords in increased EPC ratings and property value make the investment worthwhile. Replacing outdated single-glazed windows is one of the simplest and most impactful steps landlords can take to bring properties up to higher EPC standards. The change will make a substantial difference in optimising energy usage and home sustainability.
Replace an old boiler
Boilers are integral to the energy efficiency of a property, and if a rental has an old, inefficient boiler, it can have a huge impact on the overall EPC rating. In fact, moving to a new condensing model can bring the EPC rating up by as many as 40 points, and with the minimum threshold sitting at 39 points, it’s a change that can help landlords meet the requirements with a single change. A boiler upgrade can cost in the region of £1,000 and £3,000 but it’s a massive improvement to the energy efficiency of the home. It’s also worth pairing a boiler upgrade with other energy-efficient technologies like boiling water taps and smart thermostats.
With EPC standards for rentals set to increase substantially in the coming years, now is the time for landlords to evaluate their properties’ ratings and make a plan to reach higher targets. Minor or major, any steps taken to better regulate energy usage in rental properties will have a positive ripple effect.
Landlords should aim for good EPC ratings not just to meet compliance but to genuinely make a difference through improved sustainability and eco-friendly living. With so many affordable technology solutions and renewable options now available, optimising energy efficiency is an achievable goal for most rental properties. By working to minimise their environmental footprint one upgrade at a time, landlords can collectively help shape a greener future for housing in the UK.Install smart technology
One of the best upgrades landlords can make to a property is installing smart features. They add convenience for tenants living in the property but they also make it more energy efficient which can help improve the EPC score. They give detailed insight into how much energy the property uses for better decision-making moving forward. Smart meters are the perfect solution to understanding the effectiveness of the changes you’re making and make it easier to control energy consumption in the property, which can save money on utility bills over time.
Switch to renewable power
While more costly upfront, renewable energy systems substantially enhance a property’s energy performance and sustainability. They generate power onsite so are not subject to utility price fluctuations, and government grants and incentives are available to help reduce installation costs.
Solar panels are the most popular choice if a rental property can accommodate them. They convert sunlight into electricity for powering the home, and any excess energy generated is sold back to the grid. Solar panels can reduce or eliminate traditional grid-powered electricity usage in homes. Another option is air or ground source heat pumps which extract heat from the air or ground to heat homes.
Renewable energy technologies demand a greater upfront investment, but the long-term benefits to efficiency and affordability are substantial. They reduce dependence on oil and gas, increase property value and appeal to eco-minded tenants. For landlords focused on optimising energy performance and meeting stringent EPC standards now and in the future, renewable energy upgrades are a viable avenue worth exploring based on property attributes and budget.
Fit warmer flooring
Upgrading flooring is an often overlooked way for landlords to enhance a property’s energy performance and EPC rating. But installing underfloor heating, whether water or electric based, is an effective measure provided the property has proper insulation. Underfloor heating operates at lower temperatures to warm floors and rooms, so it requires less energy to run as long as homes retain heat well.
Used alone or with existing central heating and radiators, underfloor heating can make properties significantly more efficient. Water-based underfloor heating, while more complex to install, is cheaper to operate in the long run compared to electric underfloor heating.
Replacing old or inefficient flooring, like concrete, with flooring options that insulate better is another useful upgrade for energy performance. Solid wood, engineered wood, linoleum and vinyl flooring materials are good choices as they minimise heat transfer. Laminate flooring contains thermal insulation and prevents heat loss through floors, while natural stone tiles or slate, when installed over underfloor heating, function well by absorbing and slowly releasing heat.
There are other ways that landlords can improve their EPC ratings. For example, getting an EPC assessment from a qualified assessor can highlight any issues bringing the rating down, and where landlords would be best to invest their time and money for the best results. With the information gathered from the assessment, landlords can then create a clear plan of action, factoring in the time needed to carry out those changes and the budget required.