An EPC, or energy performance certificate, is a document which indicates the energy efficiency of a house, flat, or bungalow.
EPCs are drawn up by an accredited domestic energy assessor according to something called a Standard Assessment Procedure.
This rates properties between A (very efficient) and G (very inefficient).
EPCs were introduced by the UK Government in 2007 with the aim of letting prospective buyers and renters compare how costly properties they are considering are to run.
Some people argue that the way EPCs are currently implemented is problematic.
When do I need an EPC?
If you are considering marketing a property for sale or to rent, you will need an energy performance certificate. No ifs, or buts, this is a legal requirement.
This is the case whether you are renting a property out, leasing it, or selling it.
Once issued and visible on the EPC register, an EPC remains valid for ten years, provided no changes are made to the property’s overall energy efficiency. If you want to sell your property in that time you will not need a new EPC, providing there have not been any changes.
If you need to check if your property has a valid EPC, there is a tool for this on the Government’s website.
How do I get an EPC?
EPCs can only be produced by accredited domestic energy assessors.
They will collect data on the dimensions, construction, and any heating appliance. The assessor then enters this information into an approved software model to calculate the energy consumption and environmental impact of the property.
You can find a qualified domestic energy assessor using this tool on the Government’s website.
Getting a new EPC created will typically cost you between £60-120, depending on the property’s size, age and location.
What is contained in an Energy Performance Certificate?
The first section of page one of the certificate lists the property’s current energy costs, broken down into heat, light and hot water. It also provides a figure for the potential savings you could make if you implemented all the recommended measures.
These estimated energy costs do not include appliances, so in reality any given property’s energy bills will be quite a bit higher than the EPC states.
The second section shows the property’s current A to G EPC rating and its reasonable maximum potential rating. This can often be a lot higher than its actual rating. Some EPCs may also have a chart showing the property’s environmental impact in terms of CO2 production, in addition to its energy use.
The second page shows how efficiently the individual elements of the property perform. Each item on this list of elements is rated from one to five stars. This includes the walls, roof, floors, windows, heating, heating controls, hot water system and lighting system. Solid brick balls with no insulation will score a one, while thick cavity insulated walls will score a five. This page also features an estimate of your property’s heat demand in KW/y, (kilowatts per year) and how much various potential insulation methods could help you save energy.
The next thing contained in the EPC are recommendations about how a property could be made more energy efficient. These measures often include things like double glazing, internal or external wall insulation, suspended floor insulation, hot water cylinder insulation and changes to the lighting and heating systems, and solar panels. The EPC certificate shows each upgrade in order of impact, suggests how much it will cost and what the property’s rating will be afterwards.
Finally, an EPC will include details about the assessment itself. This includes the name, contact details and accreditation number of the assessor and the date of the assessment. Conveyancing solicitors may check these details as they go through the legal procedure of buying or selling a property.
What do EPCs mean for landlords?
While energy efficiency is important for all homeowners, energy performance certificate ratings hold particular importance for landlords.
On April 1, 2018, legislation came into force requiring all new tenancies to meet minimum energy efficiency standards. In 2020 this was extended to apply to all pre-existing tenancies too.
This new legislation made it illegal to rent out a property with an EPC rating below E and put a potential £5000 fine in place for anyone caught doing so.
Exemptions are available. However, these require the landlord to spend £3,500 on the energy efficiency improvements recommended in the property’s EPC, or to get three quailed installers to agree that no improvements can be made for less than this cost. These exceptions only last for five years, and then they must be reviewed.
What are the problems with EPCs?
A couple of concerns have been raised over the years regarding EPCs.
Lots of people, including the Telegraph, have called out the way they are calculated as “not fit for purpose”. They have said EPCs prioritise financial efficiency over environmental impact. Of particular concern was a now fixed legacy problem.
In 2007, heating a home using gas was deemed much more environmentally friendly than using electricity. Due to the advent of widespread renewable energy and heat pump technology, this changed in the mid-2010s.
Another concern people raise about EPCs is that different assessors give very similar properties different results.
A report carried out by Hamptons Estate Agents found that flats in the same block, or houses in the same street often had very different EPC scores. Given the similar construction of houses in a terrace, or flats in a block, this divergence shows the system is probably not as accurate as intended and so the rating received by any property is only an approximation.
Are any more changes coming to Energy Performance Certificates?
After a consultation in 2020, the UK Government proposed plans to increase the minimum EPC rating for privately rented property’s from E to C.
It is expected that the amount you would need to spend on energy efficiency improvements in order to secure an exemption would increase from £3,500 to £10,000, and the exemption will still only last five years.
Finally, the potential fine for failing to maintain a C grade EPC or an exemption could increase from £5,000 to £30,000.
It is currently thought that this will apply to newly let rentals from 2025, and to existing lets from 2028.
These changes mean that many landlords will be expected to pay the full £10,000 they expect it to cost to bring the average UK property up to a C standard. This would hit owners of older property’s even harder.
Given that many landlords own property’s pre-dating the Second World War, which could be almost impossible to bring up to a C standard, there is substantial worry over proposed EPC changes.
Energy performance certificates were introduced in 2007 with the goal of letting potential buyers and renters know the energy performance characteristics of a property. Having a valid EPC is now a legal requirement for anyone marketing a property.
Once produced, an EPC is valid for 10 years and is held on the EPC register for anyone to view.
EPC ratings are hugely important for landlords. This is because the ranking system derived from EPCs is used to determine whether a property is legal to rent.
Currently, properties which have an EPC rating below E cannot be rented out in the UK without an exemption. Gaining such an exemption would typically require you to spend £3,500 improving the energy efficiency of your property.
The UK Government has announced plans to increase the minimum energy efficiency rating from E to C, and the minimum spend required to secure an exemption from £3,500 to £10,000. Given the age of the UK’s property stock, many landlords think fear these changes will be disastrously expensive and could force them to sell.
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