News

Sep 07, 2023

BREAKING: Landlords ‘to be given three more years’ to reach EPC minimum

Ministers are considering a punitive scheme to fine landlords up to £30,000 if they fail to upgrade their properties to a minimum band C by an extended deadline of 2028 instead of the current 2025.

Ministers are considering a punitive scheme to fine landlords up to £30,000 if they fail to upgrade their properties to a minimum band C by an extended deadline of 2028 instead of the current 2025.

The Department for Energy Security and Net Zero had previously proposed a deadline of 2025 for newly-let rentals to achieve an energy performance rating of at least C, and a deadline of 2028 for all other rented properties.

But now all rental properties will have to reach the minimum standard by 2028, it is claimed.

This adds fuel to an already flammable debate over how landlords are expected to pay for upgrading properties, particularly in areas where the circa £10,000 to £15,000 costs of meeting the EPC minimum represents a considerable chunk of the bricks and mortar’s value and/or annual rental income – particularly outside London and the SE.

The Daily Telegraph’s report is linked to the Government’s yet-to-be published results from its consultation on the issue, which was launched in early 2021.

If true, the proposals would see some two million landlords forced to upgrade their properties even though the maximum spend cap will be set at £10,000.

This cap, which was originally £3,500, is the upper limit of expenditure that landlords will be expected to fork out to upgrade properties without being banned form renting them out – or £6,500 more upfront than before.

It is reported that discussions had been held with stakeholders on the proposals, but ‘no decision has yet been made’.

Rik Smith (pictured), Head of Tenancy services at rent guarantee platform Goodlord, says: “I’m sure the sector will welcome the proposed extended deadline to get properties up to standard, but there’s an enormous amount to do before then.”

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LL won’t be forced to comply with this ridiculous EPC C status requirement.

This is because LL will sell up or move from long-term lettings.LL who choose to stay even when Labour introduces the even more ridiculous Renters Charter will see LL giving up long-term letting.

Those properties that are suitable for FHL; AirBnB and SA will be used as such.

Letting properties not suitable will be sold off which I would suggest will be most of them.

I believe that there are currently about 600000 letting properties that aren’t currently EPC C status.

Also what happens to the approximately 300000 fraudster accidental LL that let residential properties without CTL from lenders?

Will these residential properties be required to meet EPC C status when they aren’t proper letting properties?

Would it be the case that where a lender grants CTL that the residential property will have to be C status?

What if the residential property is let out but is mortgage free.

Will the homeowner be required to have the property meet C status requirements!?

I can still see a mass exodus of LL when Labour become the next Govt.

S21 will be utilised to enable LL to sell up.

You keep blaming Labour when this is a TORY policy being brought in under a TORY government…

People like you are ridiculous. 14 years of a Tory government absolutely destroying this country and yet you still see absolutely insane comments like “tHiS Is All lAbOuRs fAuLt”

3 more years to get sold up and really cause the rental market to crash. Or amortise it at £2000 per year and add that to rents and really cause the rental market to crash. What a well thought-through policy proposal.

….and meanwhile, millions of homeowners are allowed to live in EPC-D and below properties.

Bonkers !!

Yes because you aren’t offering a service and getting paid to live in your own home

So true!

This is amazing news for those landlords with EPC-C and above properties.

I guess those landlords without will be selling up to invest elsewhere and tens of thousands of innocent tenants will be investing in sleeping bags and living under bridges.

Having just returned from a holiday in LA, I’m certainly glad there aren’t any bridges near me as those homeless ghettos certainly don’t add much to the street scene – I wonder if they’re an EPC-C or above?

Oh how terrible having to provide energy efficient homes to those who pay your mortgage for you.

What happens if you spend £10K (‘max spend cap’) and the property still doesn’t meet EPC C? The proposals make no sense.

Where will the trades and materials come from to carry out these works en masse?

Given the housing shortage and the inability to rent for just a few weeks, where will we decant the tenants to so that this disruptive work can take place? Our properties already have triple glazing, GCH, loft insulation, one has partial wall insulation, the other floor insulation – both EPC D.

It’s not suitable then is it. Maybe you shouldn’t be a landlord. You should be thankful the tenants you profited from for do long paid your mortgage for you. Either pay up or sell up.

Until the EPC testers all start saying the same thing its called luck of the draw who you get. I have had 4 that all say different stuff.Drives me mad.I put IWI in and one said you shouldn’t have bothered. He also said that if I was to put it in another, not to bother as It would cost me too much…not his decision to make. I have yet to meet one that can explain all the details I need take the correct decision..Can anyone explain to me why the price of fuel will effect an epc?If have been told this and can’t understand it.Continously going round in decreasing circles…and despair

The EPC is produced by the assessor entering data into a system which produces the EPC rating and the recommendations, so if you are getting different results it’s because some of the assessors are entering incorrect data. The problem is knowing how good an assessor is; it’s like trying to find a good tradesman or mechanic.All retrofit insulation will improve the EPC but it’s difficult to say by how much without actually producing the EPC.The fuel price effects the EPC because the purpose of the EPC is to give an indication of the energy cost of living in that property, not the environmental impact.

Well, due to the importance of the subject, shouldn’t this be standard all around the country? As mentioned above, I have heard testimonies of different results from the same assessor on twin properties on same area. By reading the EPC report, there are gray areas. What is it that? How an assessor can identify if there’s cavity insulation? Which is another dubious area, some say the cavity is to be left as it is, others suggest to insulate.So if EPC is to calculate the living cost, why not home owners, hotels, hospitals or any build in the country are not included? Let’s be fair, or all do or remove such confusing “energy performance” that is not accurate, does not make sense in certain aspects, and it based on an individual opinion, which is not fair.

You sound absolutely ridiculous. “It’s not fair”

Maybe your tenants don’t think it’s fair you’ve profited off them and they paid your mortgage and bought your house for you.

Yet more idiotic announcements without dealing with one of the principle issues surrounding EPC’s and that is that the so called “surveys” need to reflect the measures that are already installed within the properties.As has been stated by several of us over the years, the existing regime whereby the “surveys” are non intrusive means that loft voids, attics, false ceiling areas etc – all such areas that either do or are likely to have insulation measures within them are being treated as though there is no insulation, thereby resulting in a lower grade of EPC being issued.One could say that to impose fines and the like on Landlords for properties failing to achieve the “C” rating without, first of all correcting the stated irregularity is tantamount to fraud.If you add that to the ridiculous scenario we have here in Wales where, for those of us who have wanted to and are wishing to issue converted contracts, the existing legislation that has been put in place by the Welsh government is unworkable to the point where it makes it impossible to legally comply with its requirements.Don’t you just love our politicians, whether central government or devolved.

The EPC assessor will record accessible insulation and for inaccessible areas the system will assume insulation levels require by building regs for the year of construction or conversion, it will not simply assume there is no insulation. Also any certified retrofit work can be included in the assessment even if not accessible. Most lofts with insulation are accessible but if not the owner would have to do the work to create access.

This is a Tory policy. Devolved governments do a much better job than Westminster

Let us be silly. If a minor misdemeanour of not meeting a c rating on a epc can attract a fine of £30,000 then surely telling lies to parliament should be at least a life prison sentence or perhaps violent assault or robbery the death penalty?? Not being serious but trying to put things into perspective.

Yes but that two-bed terrace of yours is the main reason for global temperature change, so surely for a small investment of £10K of your money, its worth it to save the planet!

The planet doesn’t need saving.It has been through 6 previous extinctions events, and look, its still going. Humans simply do not have the ability to cause serious harm to the earth or destroy the earth, no matter what they do, including all nuclear weapons going off at the same time.Yes, we are polluting the air, lands and seas and animals are going extinct all the time. But this is not the same as destroying the earth.

It is only what exists on the outer crust of the planet that is at risk, if you believe the climate alarmists.

So what, we all move underground? But then who would we pay extortionate tenancy fees to?

Who would tenants pay the extortionate rent to? You know the rent that bought your house?

Homelessness will be on the government’s agenda in 2028 as LL sell up.

I have x10 small flats. That would mean £10,000 x 10 = 100,000. Bank rates going up, rents can’t go up any further – where is the money going to come from? I haven’t got it. Not to mention insurances going up, gas certs going up, repairs etc etc. The government is loopy. I might as well give my flats to the tenants and go and fill shelves in Tesco.

who said rents cant go up any further? – mine have all gone up 35% in 2 years and another 10% coming.

if your units are in a “price sensitive” area, sell them all and buy 5 somewhere the demand outstrips the supply – perhaps somewhere like the whole of the UK

Um, if she’s owned the properties for several years and now sells, even if the value has kept pace with inflation she will pay so much tax on inflation she will not be able to buy much, if she has interest only BTL mortgages to redeem the cost of replacing those will mean she ends up with almost nothing particularly if she’s in the North.

Hard being a landlord I guess – if only it was easy and every could do it eh.

She already said she cant put rents up and she cant spend the £100,000 – so her only choice is to sell her 10 units.

I suggested buying 5 (not 10) in a different area with better opportunities.

Neither you nor I know her financial set-up so neither can comment on the ins and outs

Its Win-win for the government.1) You pay for the work and they get a Feel Good Feeling.2) You pay the fine – Bad Landlord naughty boy, and another fine next year.3) You sell up and pay Capital Gains Tax on Inflation – Bad Landlord greedy pig.

We have a D rating for a property we inherited. It is part of an estate built by the admiralty in WW2 and has a flat roof as it was originally grassed so as to be invisible from above. The recommendations in the EPC are that we should spend approximately £40000 to save the tenant £500 per year. This includes having bottles of water on the roof, solar panels etc etc. None of the recommendations cost less than £10K. How come when we enquired about free/subsidized solar panels for our own house years ago we were advised that we were not entitled as we didn’t face the right direction? Now every landlord has to fit them no matter which way the property faces, even though they would be absolutely useless. Governments love box ticking exercises, and this is all this is. Something to report back to the WEF about. But the sad thing is that we, and many others will be forced to sell because of it, and a wonderful lady tenant will be forced out of her home. And then what happens when this gets revoked, and our pension pot has effectively been lost from under us? My husband and I are unable to sleep because of this stress.

The tenants will end up paying for all of this, ultimately.

How about a fine of up to 30k for all EPC testers that get it wrong?

I wonder what you need to do to get an EPC grade A or B.

…… how to get an EPC-A or B ?

Pay £1,000 and do an EPC Assessor Course – then issue your own

You could offer your own “guaranteed C” service to any landlord in exchange for a £500 cash test fee.

Two of those each day M-F and you’re on a nice £250,000 a year.

This is not an extra 3 years – it was always 2028 for existing tenants, they have just scrapped the 2025 for new tenancies.

S21 being issued this week to young couple who have no desire to move but who live in an electrically heated Victorian Terrace. EPC E because of electric heating & solid walls & floors, but their home. They will need at least an extra £150 pcm to rent, if they can find anywhere, + the expenses & hassle of moving. Well done Govt!

…….. and don’t forget, we still wont have enough (a) materials (b) contractors to do all of the required “improvements”

The more and more this Government meddle and tinker, I’m convinced they’re doing it simply to screw over the next Labour Government and digging them a massive hole to try and climb out of.

More vacuous nonsense from probably the final tranche of Conservatives on this matter; doubt they’ll be running the whelk stall beyond next year as everyone’s had enough of their incompetence.

Where tenants and landlords are concerned, over the years the Conservatives have systematically wrecked the supply of affordable rental housing whilst making it increasingly unattractive to anyone else to remain as a landlord. Quite why you would intentionally choose to create unnecessary hardship and alienate so many people given that housing is one of the key, basic needs of any civilised society is a mystery.

Put bluntly, their record on housing is utterly dismal. Selling off council housing stock (for votes) without replacing it, selling off MOD residential property, introducing onerous legislation which doesn’t affect the minority offenders it’s aimed at, and now pursuing an unattainable and unrealistic net zero target given existing housing stock will make homeless 2/3rds of renters (i.e. the known housing stock that falls below EPC category “C” and which, however much money you throw at it, cannot be improved to reach higher standards). And given that the EPC scheme is unreliable and unproven at its kindest, this makes absolutely no sense whatsoever.

Our buildings are over 100 years old, unlisted so no exemptions, but don’t and won’t ever meet the higher EPC standards – it’s simply the way they were built (rather more solidly than today’s construction methods). We maintain them well, we charge reasonable rents in line with the European approach, our tenants are happy and stay long-term, and intentionally sought these buildings to live in despite the EPC ratings. None of our tenants are remotely in fuel poverty, the cited reason for EPC prior to net zero.

We will not be selling up on an EPC whim, thereby creating a huge CGT bill for the Govt’s benefit. Given the mooted punitive sums mentioned, should this non-sensical proposal come to pass then it will make financial sense to seek advice as to how to restructure matters accordingly.

Frankie,That’s useful info about what the EPC system is suppose to assume when the assessor enters the info about insulation.But in our case we had a C that then dropped to a D on the ten year renewal because the new assessor claimed that the insulation cannot be assumed any more.Do you have a source on your info, would be very helpful for a lot of us to try to challenge a dropped rating for this kind of situation?

Current conventions used for EPC’s, link below, select RdSAP conventions 11.3 page 11 section 3.03a.https://bregroup.com/sap/standard-assessment-procedure-sap-2012/

The assessor doesn’t make the assumption, the software selects according to the age of the property. A drop in rating could possibly be due to changes in the conventions, or the assessors have estimated different ages for the property or an assessor has made a mistake in some aspect of the data recorded. Unfortunately we don’t get to see that data so the only redress is to contact the accreditation body of the assessor, shown at the end of the EPC, and question why the rating has changed. They will be able to review the data in the new EPC but if there was an error in the old EPC I doubt that anything can be done.

It’s very rare for regulations to be relaxed in ANY business sector and many other business sectors are also regulated… Open a restaurant and you WILL be getting a visit from the local environment health officer for example. Open a pub you WILL need an alcohol license, Buy a car and you WILL need an MOT if you want to drive it, along with a licence etc.

This move of scrapping the “Introductory” period of new tenancies at 2025 is the same tactic used with EPC’s in general.The original plan was to staircase from E to D then on to C. Govt just removed the middle step and jumped from E to C (The eventual plan of moving to C has been known for a decade now)

INVESTORS COMPLAIN that they are being singled out with regard to EPC’s…

The fact is that it was always going to be easier to legislate against landlords first. Now EPC’s are a regular feature in renting properties the next INEVITABLE step is now on the horizon.

The Minimum Energy Performance of Buildings Bill is currently (2022) making its way through Parliament.The FIRST SENTENCE in that bill states…

“The Secretary of State must ensure that all domestic properties achieve atleast EPC Band C by 2035, where practical, cost-effective and affordable”

NOTE…. That’s not rental properties THAT MEANS ALL PROPERTIES.

Not just rentals so unless you are planning to upgrade your own home soon you might want to consider moving to an EPC C now…. Before the Sh*t hits the fan in a few years time when folk realise the additional costs attached to buying EPC D or below houses on the open market and prices begin to fall as a consequence.

My guess is that just as listed buildings are cheap because no one wants the hassle that comes with owning them, in the future low EPC rated properties will suffer a similar fate and have a permanently lower value compared to similar size EPC C or above properties.

So, my advice to all landlords is to realise that they need to BITE THE BULLET, Forget about trying to upgrade E rated properties, sell on their older properties NOW and achieve pretty good property prices and re-invest in modern C rated units before first time buyers become aware that it is they who will end up saddled with having to make those EPC improvements down the line a decade from now, because once they realise that uncomfortable fact it WILL further impact on the value of those homes needing a lot of work.

Presuming that The EPC move to C comes to fruition in 2028 the shortage of available properties for rent will rise fairly quickly due to natural churn in the rental market therefore those investors who got ahead of the game and own a C rated portfolio should enjoy huge rent rises as shortages create bidding wars between tenants.

I can see properties being advertised for rent at “Offers over £xxx” or even sealed bids 😊(I’m already being increasingly contacted personally by people asking me if I have anything available) So properties will most likely never even be advertised but let directly to those with the best jobs/finances.

Nah OO will ignore EPC C status.

Govt can’t force OO to achieve C status.

Lenders won’t devalue such properties as it would cause a run on the banks as values are artificially reduced.

This green nonsense will be ignored and lenders had better not devalue or there will be a banking collapse.

This is not about regulation in respect of safety, but an unquantifiable paper exercise; no-one will die from the absence of a heat-pump in place of a new gas boiler, though they might well have heart failure when they find out that the vast expenditure has only made a marginal difference to efficiency.

I think you’ll also find that older cars – those over 40 years old – do NOT require an MOT, mainly on the grounds that they would struggle to meet the current requirements due to the way that they were designed and constructed. This exemption was introduced by, and continues to be upheld by, Government throughout the years despite the fact that fast moving, ageing items that don’t require any regular safety checks doesn’t make much sense.

Older housing similarly may not meet the latest standards, however they are generally better built, regulated where safety and a host of other factors are concerned, don’t emit noxious fumes and won’t career out of control. Why an exemption for one but not the other?

Buying ‘C’ rated properties now doesn’t mean a fig since a current ‘C’ rating could well be downgraded to a ‘D’ on the next renewal, which someone has already experienced and pointed out in this post.

As an accidental landlord I have had enough and am leaving the PRS. It’s not worth all the aggravation.

And it’s all for naught! Whether it’s 2028 or 2048, it’s arbitrary given the UK’s impact on global emissions. Landlords (and ultimately tenants) are paying the price for political virtue signalling. Most of my properties are D. I could spend 5 grand and they would still be D and save the tenants about 80 quid a year in energy costs, but it’ll bake in a much higher annual rent rise for years to come, way after I’ve paid off the cost of the upgrades.

No, older properties make good homes and mostly far better than ‘ todays new builds’. They are also very popular with owners and renters alike.It is possible to very substantially improve energy performance via retro fit, which is becoming increasingly effective.

The notion that millions of good older homes should be left unused/empty while we all move into our soulless new builds is plain ridiculous.

Think of the carbon footprint it takes to manufacture materials and build millions of new houses, that alone, would put attempts to always achieve EPC C or higher into the shade.

Then consider the practicalities of getting this new housing actually built. No Gov has remotely achieved the level of house building required.

We must improve our older housing stock but never at the price of deserting good homes much needed.

What about grade 2 listed properties? What about flats in blocks where you are not allowed to do the type of upgrades they are talking about?

Rik Smith,

You are cooking. We don’t welcome this change at all.

I’ll keep repeating this, as applies to many attacks on us lately.

It’s still not happening.

They/we not gonna’ be able to retrofit these 1920 houses while tenant is living there & on the cheap rents a lot of tenants are paying.

Govt has to stop penalising tenants AFTER they’ve moved into their home.

Who’s paying for this then?Cause if tenants are paying cheap rent ie. Landlord looking after em, & then maybe £5000 or £30,000 to upgrade from E to a C, Landlord then says I can no longer look after u with cheap rent. Cheap rent doesn’t pay for these outgoings, I’ve now got to charge u what the Landlord is charging his better off tenants up the road who’s paying more to live in that New build.

I’ve got to start telling tenants soon You can’t live here past 2028 anyway, Govt say u can’t if EPC not a C. And your rent doesn’t pay for a C.

Has anyone asked the tenants what they want? We know they want the better house, but when u give them choice I can give u New build for £1000pm or EPC C for £900pm, or still decent house EPC D but not New build standards for £700pm or £550pm I know what virtually all my tenants say.

I live in a block of flats owned by the Guinness partnership they have to do what is required by law to the flats including maintenance

This is probably a panic over nothing. The Minimum Energy Performance of Buildings Bill is a Presentation Bill by a Lib Dem and has virtually zero chance of being enacted.

Many thanks to you Frankie for helping us all understand some of the EPC surveys.

EPC assessment ar not fit for purpose. You can spend £10,000 on a heat pump and your EPC will go down.Recent research has shown EPC does not reflect actual energy used to heat a home.

The EPC’s purpose it to give an indication of energy efficiency in terms of cost.A modern gas boiler can be over 90% efficient and although an electric heat pump can be 300% efficient the cost of electricity is more than 3x the cost of gas so modern gas boilers are the cheapest form of heating and therefore score better on an EPC.

You can bet that Lords, party-donor Captains of Industry, and MPs who own properties will be exploring and claiming all possible grounds for exemptions on the properties they own (these do exist, beyond the £3,500/£10,000 expense). I suggest us ordinary types do the same. I’ll leave it there.

It is a private members bill and the sponsor is a conservative MP.https://bills.parliament.uk/bills/3036

It has passed it’s first reading and I very much doubt it will go away, but there may be further delays.What we need to know are the definitions of ” practical”, “cost-effective” and “affordable” as these will be the get out options which are yet to be defined.

Frankie, that bill was prorogued (not carried forward between Parliaments) so will make no further progress.

The latest version is at:https://bills.parliament.uk/bills/3231

Sponsored by Sarah Olney, a Liberal Democrat. The first reading is simply when a Bill is introduced, so means nothing. As already mentioned, this version is also almost certainly not going to progress.

The Bill contains such gems as “All mortgage lenders must by 31 December 2030 ensure that the average energy performance level of their domestic portfolios is at least EPC Band C.”

David, thanks for correcting that, my quick search found the old bill which has broadly the same content.I assume a bill will eventually go through, it’s just a question of what the exact details are and when!

Guys, isn’t better just to ignore all this nonsense and wait till this becomes law, if it ever happens?

Myself and partners are selling up, your money is better off and safer in a pension fund.Renting homes is too much work and risky now, and I am fed up with being classed as a bad guy when providing the required good service which people need.The EPC reports do not make any sense and vary all the time.

I had a few pension funds. The final salary company pension was embezzled. The SERPS went bust and was taken over for a devalued amount. The third issued a profits warning and was sold off – they took our money and give nothing back.

The entire EPC system is a farce, a joke and based on very little sense.The same goes for council tax bands.They are both subject to colossal inaccuracies and are not based in the real world.Both of these systems were created by idiotic indifference policy makers, without a proper understanding of the field they purport to make rules for.

Any government that tries to take any form of action against someone for not complying with EPC rules, will be on thin ice, for there is no defence for the existence of the EPC, never mind its validity.

Governments always screw up everything they touch with their pathetic unintelligent approaches, and this is why everything that is government-based is always a gigantic convoluted mess, costs 10-100 times more that what it should and why all they do takes donkeys years to put into place.

EPC reports are a joke .

Had new one done apparently my house has grown in SQM s despite no alterations.

If the accessors cannot even measure accurately why would anyone believe the rest of the supposed survey.

Complete nonsense..

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