All properties which are sold or let must have a current Energy Performance Certificate (EPC), and although many people don’t spend time reading them, they can be really informative for both landlords and tenants.
The most important thing to know about EPCs is that since April 2018, a rented property can only have its tenancy renewed or a new tenancy commenced if its EPC rating is E or higher. The lowest-rated properties – rated F or G – must be upgraded first, although there are some exceptions.
And the rules look set to become ever-more stringent, with talk of phasing in a requirement that properties must have a C rating or higher before they can be let by 2030.
The current legislation has major implications for landlords in Lincoln, which has the highest proportion of properties rated F and G in England. And if the rules are made stricter as planned – to make C the minimum requirement for letting – this would have a huge impact on properties in England, as the average property is rated D.
Here are five things I think are worth finding out from a property’s EPC:
- The property’s energy rating from A-G
The EPC rates a property’s energy efficiency from A (the highest) down to G, in the same way that you see on stickers on new household appliances. The first thing to check with your own let property or if buying a new one is that it is rated at least E and how much it would cost to upgrade it to a C in the future.
- A score out of 100
As well as the letter rating, the property is also given a score out of 100 to signify its energy efficiency and its potential score if improvements were carried out. The average property in England and Wales scores 60, which is a D rating. The key here is to check that it is possible for the property to score 69 or higher, which is a C rating and how much the changes would be cost.
- Running costs and possible savings
The certificate will also highlight estimated running costs, broken down into lighting, heating and hot water. This can be a helpful to tenants as lower utility bills can reduce their running costs, and of course mean they are more likely to pay your rent.
If you are running an HMO, this is also useful as you will be the one picking up the costs, so they should give you an idea in advance of what bills will be, especially with more people renting than the ‘average family’.
- Performance breakdown
Each element of the property – eg walls, windows, roof, hot water system – is given a star rating out of five, showing which areas would benefit most from improvements. This is particularly useful information, as it helps you target the areas which you can budget to improve which will improve the energy efficient the best for the least amount of money.
- Recommended measures
This builds on the information above and is one of the most useful sections of the EPC. It tells you the top actions you can take to improve the property, along with estimated costs. For instance, it may recommend loft insulation and draught proofing – both of which are relatively easy and cheap fixes.
Investing in a property’s energy efficiency makes sense not just to comply with the law but makes it more desirable to tenants as it will cost less to run, as well as being warmer and less draughty, so more comfortable to live in, meaning the tenant is likely to stay for longer too.
If you need any advice or help on ensuring your property is legally let or how to improve its energy efficiency, do contact me, I’d be happy to help.
Tweets:
1. An EPC rating can tell you more than you might think – find out the top five things an investor should know #property #renting
2. Don’t ignore a property’s EPC rating – it can tell you vital information especially with more energy efficiency rules on the cards.
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