EPCs – Energy Performance Certificates or Extra Property Costs?!

If we are honest I think that there are some landlords out there who see the Energy Performance Certificate (EPC) as a worthless document and an additional administrative chore which has to be undertaken.

As an energy surveyor myself I really do see the merit in them and see the advantage for a more energy efficient property both in terms of the utility bills that your tenant will have to endure, but also we do all have a moral obligation to preserve the planet for the next and subsequent generations. Indeed why wouldn’t we want our properties to be as efficient as is possible?

I think that as energy costs and utility bills have risen in recent years, people are taking the situation more seriously and increasingly searching out measures which will reduce costs, much as in the way I think car buyers look increasingly at the fuel economy of their next vehicle.

Part of the 2011 Energy Act requires that from April 2016, landlords of residential properties will not be able to unreasonably refuse requests from their tenants for consent to energy efficiency improvements. This is a broadly positive thing for landlords for two reasons. Firstly many of the improvements will be obtainable through a grant to your tenant and
will therefore require no upfront costs to you; and secondly it will be a useful exercise to undertake, given that you are going to need to get your property to at least a Band E prior to 2018.

By 2018 private rented properties must be brought up to a minimum EPC energy efficiency rating of “E” and it will subsequently be unlawful to rent out a property that does not meet this minimum standard. The 2018 deadline is likely to apply to new lets and renewals of tenancies, and for all existing tenancies by April 2020.

Unless you are exempt from needing to provide an EPC, perhaps because your property is listed or a non self-contained part of an HMO, we understand that a civil penalty of up to £4,000 can be levied in the event that landlords do not comply.

The main energy efficiency measures which can be available to your tenants by way of a grant include the replacing of an aged boiler and the installation or increase in depth of loft insulation. A “free” replacement boiler could be a real benefit for the landlord and a quick search on the internet will give you details of a raft of operators who have access to the various grants available. Having undertaken many surveys on behalf of the energy firms operating such schemes, I can confirm that replacement boilers have been installed where a more efficient version is available and not simply in the event that the current boiler has broken.

The requirement for an EPC was introduced in 2007 and therefore many of the early certificates will shortly be due for renewal. Consequently, it is likely that landlords could now be placing closer attention to the results of the EPC inspection to ensure that they can continue to let their property.

Even if your tenant does not qualify for grant-funded improvements, there are still things you can do for minimal cost which can improve the scoring of your property on the EPC. The most straightforward and easiest to implement is to ensure that all of the lighting is low energy. Many landlords are now using LED bulbs given their long life and low energy consumption.

Additionally you could consider increasing the level of loft insulation in your property. Aim for around 270mm of insulation at the joists and you will get the maximum credit in your EPC.

Another reasonable, inexpensive improvement is the addition of heating controls. Aim to have a programmer, room thermostat and thermostatic control valves on the majority of your radiators. It should reduce the utility costs for your tenant and will also improve your EPC score.

For those with cavity brick built properties, the installation of cavity insulation can cost from around £750 and will also make a difference to your energy score.

Indeed if you are undertaking a full refurbishment of a property then consider some floor insulation or insulated front and back doors. This will constitute a nominal increase in the overall refurbishment cost but a significant improvement in the energy efficiency of your building and therefore an enhanced EPC score.

I am firmly of the opinion that by undertaking some energy improvements your tenants will see a tangible benefit and may possibly stay longer than otherwise would be the case. They will also be less able to blame exorbitant energy bills as a reason for the late payment of rent!