If you’re a buy-to-let landlord, it’s vital you keep on top of all the rules and regulations regarding letting out a property.

One of these requirements, concerning a property’s “energy performance certificate” (EPC), is set to change, so you should make sure you are aware of how the new rules will affect you.

Properties will have to have a minimum C rating by 2028

An EPC shows the energy efficiency of a property. It offers insight into the energy bills and carbon emissions and also includes information on the potential energy efficiency of the property if certain changes were to be made.

The property is rated depending on the government’s “standard assessment procedure” (SAP) rating, which gives points ranging from one to 100. The points are then divided into different bands, which gives you the letter A to G as the official rating. A is the best rating, and G is the worst.

Since 2018, landlords have been required to have a rating of E or higher if they were to legally let out their property.

Now, those rules are set to change in an effort by the UK government to cut greenhouse gas emissions to net-zero by 2050.

The new rules state that:

  • If you are currently leasing a property out, or plan to sometime in the future, it will need to have an EPC rating of E or above by April 2023 – even if it is mid-lease.
  • If you are letting out a property on a new lease, the property will need an EPC rating of C or above by April 2025 if you are to rent it out legally.
  • By April 2028, all properties under existing leases will need to have an EPC rating of C or above.

If your property doesn’t meet the requirements and a higher EPC rating is needed, renovations will need to be made to your property to increase its energy efficiency.

How will these changes affect landlords and what can they do about it?

These new rules were announced in January 2022, so if you do need to make renovations to your property, you have plenty of time to do so.

Some of these changes may not come cheap, however, as the costs of making energy-efficient improvements can start to stack up. This may affect the profitability of your buy-to-let property, at least for a few years.

There are several different renovations to a property you can make to boost your rating. These include:

  • Double glazing – this is a typical way to improve the energy efficiency of a property as it helps trap more heat, and it can even reduce the noise from outside too.
  • Reinsulate the property – this can be either in the loft if the property has one, or in the walls. Insulating a property is relatively inexpensive and easy, and the difference it can make to energy bills can be significant.
  • Get a new boiler or repair an existing one – doing so may cost much more than the above methods, but installing a new energy-efficient boiler can be a great way to cut down on energy bills and boost your property’s EPC.
  • Change to energy-efficient lighting – this is a much cheaper option, and it can make all the difference. Currently, compact fluorescent lamps (CFLs) and light-emitting diodes (LEDs) are the most energy-efficient forms of lighting, so you have plenty of options to choose from.

Some landlords are still unaware that changes have been made to EPC regulations

Even though these changes to the law are important, a survey published by MoneyAge has shown that 3 in 10 buy-to-let landlords are unaware of the announced changes.

Judging by the results of the survey too, it’s clear that most landlords will need to improve the energy efficiency of their properties. Indeed, the survey found that 68% of landlords who responded stated their properties had an EPC rating of D or lower.

If you’re a landlord, it is of the utmost importance that you ensure your properties meet the new EPC rating requirements if you want to legally rent them from 2023.

Not only that, but energy efficiency has never been more important – at a time when energy bills are soaring and the environment needs to be protected, cutting as much energy use as possible is vital.

Get in touch

If you would like to discuss these upcoming changes, and the different ways you can meet the new requirements, please email us at enquire@london-money.co.uk or call (0207) 808 4120.

Please note

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.

Buy-to-let (pure) and commercial mortgages are not regulated by the FCA.

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