Do landlords need to worry about forthcoming EPC legislation?

Not necessarily worry, but it would pay to get in action right now, says Joe Miller, CEO at enable

There is no doubt that the cost-of-living crisis has sharpened the nation’s focus on energy

bills and the energy efficiency of our homes. But for landlords, even before Russia’s

invasion of Ukraine sent the cost of gas through the (poorly insulated) roof, there was at

least one compelling reason to look at the energy efficiency of their assets, and make a

plan to improve their Energy Performance Certificate (EPC) ratings. And in reality, you

don’t even have to be a passionate environmentalist to believe there are many reasons for

landlords to get in action right now.

The latest in a number of initiatives aimed at squeezing private landlords, the

Government’s Minimum Energy Performance of Buildings Bill proposed a mandatory

energy efficiency performance of at least EPC band C for all new tenancies from 2025 –

and even existing tenancies by 2028. Given the Government’s many trials and tribulations

in 2022, you would be forgiven for having missed the fact that the date for the Bill’s

proposed second reading in May 2022 came and went. But while it may be tempting to

breathe a sigh of relief in the assumption that the legislation is unlikely to come to pass, or

will at least be delayed, at enable we think this represents an opportunity for landlords to

get ahead of the game, secure contractors and support their tenants.

While a delayed second reading may well have a knock-on impact on exactly when the EPC

legislation is implemented, it feels very unlikely that the overall direction of travel – to

mandate better energy performance in tenanted properties – is going to change. A

shortage of professionals across the industry – from Domestic Energy Assessors (DEAs)

capable of completing the number of inspections needed, to contractors available to

deliver the required works – mean it would be prudent for landlords to make a plan now,

to avoid the inevitable surge in costs when the deadline draws nearer.

And there is no guarantee the 2025 date will be delayed. With our latest Prime Minister,

Rishi Sunak, expressly committed to achieving the Government’s target of net zero

emissions by 2050, and the cost of domestic energy continuing to feature towards the top

of the political agenda, there is little for the Government to gain by delaying the

introduction of the new rules. Our view is that it would be better for landlords to act now

than to find themselves part of the rush when the legislation is confirmed.

Part of that reasoning is based in the belief that, even without the spectre of legislation,

there are compelling financial and moral reasons to improve the energy efficiency of your

tenanted properties – alongside the obvious environmental benefits.

While the Government has stepped in to support all of us with escalating energy bills,

there is no doubt that acting now to improve the EPC rating of your properties will be in

your tenants’ interests – especially with government support due to be withdrawn from

April 2023. The benefits of reducing the amount of energy a property requires are self evident for any bills-in landlords. And reducing energy bills for tenants as the cost of food

and fuel increases will not only support those tenants, but also reduce your risk of voids

and arrears at a time when everyone will be under increased financial pressure.

And if that isn’t enough to persuade you, it’s worth considering the positive impact that

improving the EPC scores of your properties can have on the value of your asset, and even

mortgage rates. Our research has shown that an average property with an EPC of C or

above is worth £15,000 more than an equivalent property with an EPC of D or below.

Meanwhile, many mortgage lenders are starting to offer improved rates for energy

efficient properties – and landlords may even find they are unable to secure a buy-to-let

mortgage for properties with an EPC of C or below as the 2024 deadline approaches and

banks seek to manage their risk.

With the Government’s EPC legislation on the back burner – for now – it’s probably true

that you don’t need to be worried just yet. But there are compelling reasons why getting

yourself a plan today will make sure you don’t need to worry in the future, either. And with

the prospect of happier tenants, mitigated risks, lower costs in the medium to long term,

and increased value of your assets, there really is no reason not to get in action today to

improve the energy efficiency of your properties.

enable’s mission is to make Britain’s homes greener, by supporting property owners and

residents to understand their options when it comes to improving their energy efficiency.

enable’s Home Energy Report is a unique product which helps homeowners and landlords to develop a detailed understanding of the energy efficiency of their property, and make a plan to deliver improvements. The report is more detailed than an EPC, and includes real costs including additional ventilation to ensure improvements are delivered without unintended consequences and costs.