In recent years, there has been a growing awareness of the need to reduce carbon emissions and make our homes more energy-efficient. This has led to the introduction of various regulations and initiatives aimed at improving the energy efficiency of UK homes.
Currently, the UK government requires all rental properties to have an Energy Performance Certificate (EPC) with a minimum rating of an E in order to be legally let. This requirement has been in place since April 2018. However, from April 2025, there will be EPC changes for landlords. The minimum EPC rating required for rental properties will be raised to a C. This means that landlords will need to ensure that their rental properties meet this new requirement by 2025 in order to legally let their properties.
This article will explore the implications of this plan and what landlords can do to improve the EPC rating of their properties.
What are EPCs?
Firstly, let’s define what EPCs are. Energy Performance Certificates (EPCs) are documents that provide information about the energy efficiency of a property. They give a rating from A (most efficient) to G (least efficient) and provide recommendations for how to improve the property’s energy efficiency. EPCs have been required for all properties for sale or rent since 2008 and are valid for 10 years. You can use the Government website to find an existing EPC for a property here.
Why is the government introducing a minimum EPC rating?
The UK government has set a target of reaching net-zero carbon emissions by 2050. Buildings are responsible for around 40% of the UK’s total energy consumption and carbon emissions, so improving their energy efficiency is a key part of achieving this target.
One way to force landlords to improve the energy efficiency of their rental properties is to introduce a minimum EPC rating. From April 2025, all rental properties in England and Wales will need to have an EPC rating of at least a C to be legally let. This is part of the government’s plan to improve the energy efficiency of the UK’s housing stock and reduce carbon emissions.
EPC changes for landlords and implications
Landlords who do not meet the minimum EPC rating of a C will not be able to legally let their property. This means they will not be able to renew existing tenancies or enter into new ones until the EPC rating is improved.
The introduction of a minimum EPC rating has financial implications for landlords. Improving the energy efficiency of a property can be expensive, but failure to comply with the regulations could result in substantial penalties.
The penalties for non-compliance will be set out in regulations that have not yet been published. However, it is likely that landlords who fail to comply with the new EPC requirements could face financial penalties, as well as restrictions on their ability to let their properties.
Under the current regulations, landlords who fail to provide an EPC with a minimum rating of an E can face a financial penalty of up to £4,000. It is possible that similar penalties will be introduced for landlords who fail to meet the new EPC requirements.
What can landlords do to improve the EPC rating of their property?
There are several ways landlords can improve the EPC rating of their rental properties. Here are some suggestions:
- Insulate the property
Insulation is one of the most effective ways to improve a property’s energy efficiency. This could include insulating the loft, walls, and floors. There are various types of insulation available, including cavity wall insulation, loft insulation, and solid wall insulation.
- Upgrade the heating system
Upgrading the heating system can also improve a property’s energy efficiency. This could involve installing a new boiler, upgrading the existing heating controls, or installing a smart thermostat.
- Install double-glazing
Installing double-glazing is another effective way to improve a property’s energy efficiency. Double-glazing helps to reduce heat loss through windows and can also help to reduce noise pollution.
- Install renewable energy systems
Installing renewable energy systems, such as solar panels or a ground-source heat pump, can also improve a property’s energy efficiency. While these can be expensive to install, they can also help to reduce energy bills in the long run.
- Improve the lighting
Replacing traditional light bulbs with LED bulbs can also improve a property’s energy efficiency. LED bulbs use less energy and last longer than traditional bulbs, which can help to reduce energy bills.
There are some exemptions for landlords who need to meet the new Energy Performance Certificate (EPC) requirements in April 2025. These exemptions apply to certain types of properties or tenancies where it is not possible to improve the EPC rating to a C or above.
The following exemptions may apply:
- Cost exemption: If the recommended energy efficiency measures required to achieve a minimum EPC rating of a C would cost more than £10,000, this may qualify as a cost exemption. The landlord will need to provide evidence to support this, such as quotes from contractors or suppliers.
- Property exemption: If the recommended energy efficiency measures required to achieve a minimum EPC rating of a C are not possible due to the property’s design, age, or construction, this may qualify as a property exemption. The landlord will need to provide evidence to support this, such as a report from a surveyor or architect.
- Tenancy exemption: If the property is let on a short-term tenancy of less than six months or a long-term tenancy of more than 99 years, this may qualify as a tenancy exemption.
- Consent exemption: If the landlord is unable to obtain consent from a third party, such as a tenant or a planning authority, for the recommended energy efficiency measures required to achieve a minimum EPC rating of a C, this may qualify as a consent exemption.
Landlords who believe they may be eligible for one of these exemptions will need to register for an exemption on the government’s PRS Exemptions Register. It is important to note that exemptions are only valid for a limited time, and landlords will need to apply for a new exemption if the circumstances change.
If you’re a landlord reading this, check out our proptech platform, MyPropTech.
Our real estate investment software helps investors make better decisions. Good decisions are not possible without complete information. MyPropTech has the tools required for success.
- Our property data software allows investors to research markets in real-time. Users can see local market incomes, rents, and property values.
- Our property analysis tool allows investors to build sophisticate financial models in seconds. Making like for like property comparison on an after-tax basis possible. Users can even compare properties in different countries.
- MyPropTech Dynamic Pricing™ creates economies of scale for small investors. We sell property from the world’s leading developers at discounts up to 15%.
- Our property portfolio planning tool helps investors create long-term wealth. Effective monitoring, management, and benchmarking is critical to long-term portfolio performance.
Interested in giving our platform a go? Start your free trial today at MyPropTech.
Check out our other articles about proptech, here.