What will the 2025 EPC regulations be for landlords?

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What will the 2025 EPC regulations be for landlords?

By RentiD Admin

What will the 2025 EPC regulations be for landlords?


As we publish this on Earth Day, we thought it might be appropriate to tell you what you need to know about the forthcoming EPC regulations that will change the Minimum Energy Efficiency Standards (MEES).

A government consultation on the proposals ended in December 2020. If the plans go ahead unchanged, these will be applicable to landlords of residential rental properties in England and Wales from 2025.

Currently, the minimum energy efficiency standards allowed for rented properties is an ‘E’ rating on the Energy Performance Certificate (EPC).

If you are in contravention of this rule, you could face hefty fines of up to £5,000 from your local authority.
Without a valid EPC it can also be hard to find new tenants because it’s illegal to advertise a property without one. Letting agents and the property portals like Rightmove and Zoopla will not run listings without a valid EPC.

 

The new 2025 EPC regulations

What will the 2025 EPC regulations be for landlords? From 2025, it is proposed that rented property will need to have a rating of ‘C’ or above.

The change is to be phased in, starting with new tenancies of six months or more of residential property from 2025 followed by all tenancies from 2028.

The government is seeking to implement these changes to ensure homes are more energy-efficient and to reduce carbon waste, as part of their much publicised net-zero targets.

We all need to play our part in protecting the environment and these new standards obviously benefit tenants too as homes will be warmer and energy bills lower.

Along with space to meet the increasing prevalence of home working, energy efficiency and a property’s ‘green credentials’ can become major selling features for a landlord wishing to improve rental yield.

However, for landlords of older properties in particular, complying with the new standards could represent a considerable cost and task that needs to be factored in within the next four years.

As part of the proposed changes, the penalties to landlords for non-compliance are to be increased to £30,000 per property in breach.

 

Preparing for new 2025 EPC regulations

Having to jump from a minimum ‘E’ rating to a ‘C’ can potentially cost landlords like you thousands.

The government have recommend a ‘fabric first’ approach in the first instance consisting of the insulation of wall cavities, floors and lofts. Other lower cost measures can include the installation of LED lighting throughout, the addition of a smart meter and even an insulating steel front door.

However, to achieve a ‘C’ rating on the EPC, landlords may need to resort to more expensive measures including the installation of new double or triple glazed windows, more energy efficient boilers or even investing in renewable energy sources in the form of ground source heat pumps (a cost of £14,000 to £19,000 according to Energy Saving Trust estimates) and solar panels.

 

Will landlords receive financial support?

It’s easy to see how some of the measures mentioned above can become a major expense for one property, let alone a portfolio of older, less energy efficient properties.

Landlord associations and regulatory bodies like The Association of Residential Letting Agents (ARLA) are calling for financial support to help landlords make these improvements.

With the results of the consultation yet to be published, there are as of yet no plans on how the government will help landlords in funding the necessary improvements.

 

In summary – what will the 2025 EPC regulations be for landlords? 

It is likely that landlords of residential property are going to have to prepare for new Minimum Energy Efficiency Standards (MEES) standards in 2025.

This is likely to prove costly to those with older rental properties if they are to meet a minimum EPC rating of ‘C’ and avoid even more costly penalties for non-compliance.

Although RentiD recommends starting to budget for these costs now, it can be a particularly daunting prospect in the current challenging environment.

However, by following our tips on Deadly Landlord Pitfall To Avoid, Increasing Rental Yield, Rent Management, and Self-Managing Rental Properties, you can start making changes to save time, money, hassle and risk.

These will put you in a better financial position to get ready.

Self-management is a significant way for landlords to reduce their outgoings. RentiD is a property management app supported by a complete range of services on demand that can help you save time, money, hassle and risk.

If you’re a self-managing residential landlord in the UK why not join our new Facebook group Self-Managing UK Landlord Support here.

 

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