EPC Policy Updates: How to Improve Your Rental’s Rating

Original article from Landlord Vision - EPC Policy Updates: How to Improve Your Rental’s Rating

Struggling to keep up with the government’s ever-shifting plans for changing Minimum Energy Efficiency Standards (MEES) for rental properties? If so, you’re not alone! It feels like the target deadline for tightening the rules is on and off again every year.

But why wait to see what the government decides to do? Boosting your rental property’s EPC rating is a win-win. Improving energy efficiency will have benefits for you, your tenants, and the environment.

In this article, we’ll explore the government’s latest plans for future EPC policy changes and find out what landlords can do to improve their rental’s EPC rating.

EPC policy rollercoaster: Where are we now?

The goalposts for improving energy efficiency in the private rental sector keep moving. Let’s explore the timeline so far and find out where we’re up to now.

The Conservative government first got serious about boosting minimum EPC requirements in the private rental sector back in 2021. They announced plans to tighten the regulations as part of the UK’s strategy to achieve net-zero carbon emissions by 2050. At this time, the ambitious target was for all landlords in England and Wales to improve their properties’ EPC rating to a minimum of C by 2028.

Then, in 2023, Rishi Sunak threw a spanner in the works by announced that he was scrapping this target as part of plans to relax net zero goals.

When the Labour government gained power earlier this year , they immediately announced plans to reinstate the plans the Conservative government had scrapped. Under new Labour plans, the deadline has been pushed back a couple of years to 2030, but the minimum EPC rating required will remains at C.

At the Labour Party Conference in Liverpool, Ed Miliband announced that every rented home, including social housing, will need to reach decent standards of energy efficiency by 2030. He said: “We all know that the poorest people in our country often live in cold, draughty homes. It is a Tory outrage. This government will not tolerate this injustice, and we will end it.” It is hoped that the new home energy standards will help to lift over 1 million households out of fuel poverty.

According to the Home Owners Alliance, about 2.9 million privately rented homes are thought to have EPC ratings below C. Labour has pledged £13.2bn in grants and low-interest loans over the next 5 years to help meet the deadline. The government’s Warm Homes Plan will provide financial help to landlords upgrading their rental properties with insulation and low-carbon heating.

It is expected that a consultation later this year will decide upon a cap for the amount landlords will be required to spend on upgrades. Previously, this figure was £10,000, and Labour is expected to reinstate the cap at a similar level.

What is the current minimum EPC rating for privately rented properties?

Currently, the Minimum Energy Efficiency Standards (MEES) introduced in 2018 require all privately rented homes to have a minimum EPC rating of E. It is against the law for landlords to rent out properties with an EPC rating lower than E unless they have a valid exemption. Landlords must pay for upgrades to reach this level, with costs capped at £3,500.

How to find out what your rental property’s EPC rating is

If you can’t find the paper copy of your property’s energy performance certificate, you can search for and view it online instead via the government’s EPC register. Or alternatively, you can apply to get a new energy certificate if you don’t have one or it has expired. EPC certificates are valid for 10 years. If the certificate expires whilst you have tenants living in the property, you don’t have to get a new one straight away, but you will need a valid certificate before you can market your property to new tenants.

What factors affect your rental property’s EPC rating?

If improving your property’s EPC rating is on your to-do list, it’s important to understand how the rating is calculated to help you identify the most effective ways to improve yours.

EPC ratings are calculated by accredited Domestic Energy Assessors using a government-approved method called the Standard Assessment Procedure (SAP). After carrying out a visual inspection of your property, the assessor will calculate its EPC rating. The calculation takes into account various factors, which we’ll look at in more detail in a moment. It assesses the amount of energy the property uses per square metre and the level of carbon dioxide emissions it produces in tonnes each year.

Your property’s rating is first expressed in terms of its energy efficiency on a scale of 1-100. This number is then translated into a letter rating. The higher the number, the more energy-efficient the property is. The SAP methodology is regularly updated to reflect advances in building technologies.

Key factors considered when calculating a property’s EPC rating include:

• Property size and layout – Smaller properties require less energy to heat. Open-plan layouts may allow for better heat distribution.
• Building fabric – The materials used in walls, roofs, and floors, along with insulation levels, have a big impact on energy efficiency. The type of wall separating the property from neighbours also influences energy retention.
• Windows and doors – The type, size, and glazing of windows and doors are significant. Higher-quality glazing helps reduce heat loss, which can improve the property’s efficiency rating.
• Heating systems – This factor has the largest impact on the EPC rating. The type and efficiency of the heating system can greatly influence the score. Renewable energy sources can also improve the rating.
• Ventilation – Effective ventilation systems help reduce heat loss while maintaining good airflow, which can positively affect the EPC rating.
• Lighting – The number and type of fixed lights play a role in the overall energy efficiency score.

Understanding these factors gives you a clear starting point when making improvements to your property’s EPC rating.

When do I need to start improving my property’s EPC rating by?

The 2030 deadline may seem a long way off now, but there’s no time like the present. Improving your property’s EPC rating brings long-term benefits for both you and your tenants, so it’s wise to start planning and budgeting for the improvements sooner rather than later.

Start now and take small steps over the next few years to get ready for the new EPC requirements to help spread the cost and avoid last-minute stress and expense.

Your tenants will thank you when their home is warmer and more comfortable, and their energy bills are lower. A better EPC rating also has the potential to help maximise your property’s rental potential, encouraging higher rental yield in the short term as well as increasing its long-term value. Plus, better energy efficiency enhances tenant satisfaction and retention, reduces your carbon footprint, and attracts eco-conscious renters who value sustainable living.

How can I improve my rental property’s EPC rating?

Your property’s energy performance certificate comes with a recommendation report that offers advice on how to make your property more energy efficient and boost its rating. This is a great place to start.

Quick and easy upgrades

• Insulate your hot water cylinder – Adding an insulating jacket to your hot water cylinder and lagging to your hot water pipes is a quick and affordable upgrade. It helps to minimise heat loss and keeps water hotter for longer, meaning less energy is required to heat it.
• Draught-proof – Gaps in windows, doors, and floorboards allow heat to escape, increasing the amount of energy required to keep the property warm. By filling or sealing these gaps, you can keep more warmth inside and improve your property’s EPC rating. Draught-proofing can be particularly effective in older homes.
• Upgrade to LED lighting – Replacing traditional bulbs with LED lighting is another simple way to cut energy usage. LEDs use up to 90% less energy than incandescent bulbs and can last up to 25 times longer.
• Install a smart thermostat – Installing a smart thermostat, such as Hive, Google Nest, or Tado, provides better control over heating schedules and can significantly reduce energy bills by only heating the property when needed. These devices learn household patterns and adjust heating accordingly, optimising energy usage and improving the property’s EPC score when paired with an efficient boiler.

Bigger investments for significant gains

• Replace the boiler – Switching to a modern, energy-efficient condensing boiler can make a significant difference to your property’s EPC rating. Condensing boilers achieve over 90% efficiency by capturing heat that would otherwise escape, making them one of the most impactful upgrades.
• Upgrade windows to double or triple glazing – Windows, in particular, are a primary source of heat loss. Upgrading to high-quality double or triple glazing can significantly reduce heat escape, improve insulation, and raise your EPC rating. Triple-glazed windows, for example, are up to 40% more efficient than A-rated double-glazing and can reduce energy bills by up to 50%. This upgrade can significantly improve both tenant comfort and energy efficiency.
• Insulate walls, floors, and loft – Improving insulation is one of the best ways to boost your EPC score, especially for older properties, which often have inadequate insulation. In the UK, about 35-40% of a home’s heat is lost through walls, 20% through the roof, and 10% through floors. Cavity wall insulation, loft insulation, and underfloor insulation all contribute to significant energy savings and can noticeably raise your EPC rating.
• Install renewable energy sources – Ok, so this one requires a big commitment. However, using renewable energy sources like solar panels and ground-source heat pumps can greatly enhance your rental’s EPC rating by producing cleaner, cheaper energy. It would also help to differentiate your property in the market, decrease your investment’s carbon footprint, and attract eco-conscious tenants.

So, why not start ticking some of these upgrades off your list now to spread the cost and improve your property’s value? Making property upgrades that boost your rental’s EPC score offers short-term benefits and helps to future-proof your property against tighter energy regulations.