Energy efficiency is a hot topic.
The Government has set itself some ambitious emissions targets over the next few decades – great news for the planet, but the new rules could create challenges for some landlords.
To meet them, the carbon emissions from all buildings will have to be close to zero by the year 2050. It’s a big leap and in the longer-term properties will have to take their energy efficiency rating up to A. However, in the shorter-term, there are still some serious changes to be made in the private rented sector:
Tables of contents:
- Is it a legal requirement to have an EPC?
- Do I need to renew an EPC during a tenancy?
- How often should an EPC be done?
- New guidelines
- Getting the EPC
- How to boost your EPC rating
- Get an EPC performance certificate with Howsy
Is it a legal requirement to have an EPC?
Yes, it is a legal requirement to have a valid EPC when you let or sell a property.
The document exists to give a clear picture of the energy efficiency rating of your property, giving prospective tenants or potential property owners insight into the potential running costs of the home. Ratings range from A (the best) to G (the worst).
In England and Wales, it is a legal requirement to provide a copy of the EPC to new tenants at the start of each new tenancy before they move into the property (most people provide it when they sign the tenancy agreement). If you have a commercial property, you must display your EPC energy rating somewhere that it is easily visible. In Scotland, it is a legal requirement to display a copy of the EPC in the property.
You can check if your property has an existing EPC (they last for ten years) by checking on the EPC register, a free online database that holds copies of all energy performance certificates. The documents are uploaded by the assessor that carries out the check and are publicly available, and downloadable evidence of a property’s performance rating.
Do I need to renew an EPC during a tenancy?
The EPC must be made available free of charge at the point the property is marketed. Because the EPC is made available at marketing, this means if you have a tenant in situ and the EPC runs out, it does not need to be renewed until the property is back on market again.
You only need to renew your EPC during a tenancy if the certificate’s ten-year‘ shelf life’ expires during the length of the tenancy, not at the beginning of each tenancy agreement. EPC requirements are not like gas safety checks, they do not have to be carried out annually, so it is unlikely that your tenants will be bothered often by this process.
If you do need to renew your EPC during a tenancy, don’t forget that you need to allow your tenant 24 hours’ notice before entering the rental property, and they are within their rights to deny you access to the home. It is a good idea to make a request via email, so you have evidence that you attempted to gain access, so should you need to highlight that you were unable to gain access, you have evidence that you tried.
How often should an EPC be done?
An EPC lasts for ten years. You can view your current certificate on the EPC register, if you are unsure when the date expires.
However, it is important to consider that if you have had any work done on the property that would be likely to increase the energy efficiency rating, it would be a good idea to have a new EPC carried out, to make sure that your certification reflects your property’s current EPC rating standards.
What are MEES?
Developed from a package of policies including the infamous Green Deal, the Minimum Energy Efficiency Standards (MEES) was introduced in March 2015.
Designed to tackle poor energy performance in private rented properties, the new regulations really came into force on 1st April 2018, when a minimum standard of band E was introduced to the rented sector, meaning it was no longer possible to renew existing tenancies or grant a new tenancy if the property has an EPC rating of F or G. On 1st April 2020, the changes will be extended across all existing tenancies. If your property falls below the E rating, you must either look to improve the rating, register an exemption or sell the property, thus removing it from the rented market.
How do you comply?
In order to comply with MEES, you have to show that you are attempting to make all changes necessary to bring it up to the required level. A cost cap of £3,500 (including VAT) has been introduced, to limit the amount that landlords are expected to spend on improvements. Any changes that have been made since 1st October 2017 can be included in this cost.
If you are unable to make our property meet the E banding for £3,500 or less, you should make as many improvements as you can for that amount- keeping clear evidence of the changes you have made and how much they have cost – then look to register an exemption.
Some funding may be available through schemes managed by your local authority, which can be used to fully fund or top up self-funding.
Registering an exemption
There are cases when it is simply not possible to increase a property to the minimum standards required. Non-compliance with MEES regulations can be an expensive mees-take.
Penalties operate on a sliding scale, with fines set at 10% of the property’s rateable value for the first three months of non-compliant letting (with a minimum penalty of £5,000 and a maximum of £50,000) before moving up to 20% of the rentable value after three months (with a minimum penalty of £10,000 and a maximum of £150,000).
With such hefty penalty notices to consider, it is important to register an exemption if you don’t think you are going to be able to reach the right requirements.
- ‘All relevant improvements made’ exemption: you’ve spent up to the required amount (£3,500) and the property is still below band E. This exemption lasts five years.
- ‘High cost’ exemption: No improvements can be made, as even the cheapest measure would be over £3,500. Three quotes from qualified installers are required. This exemption lasts five years.
- ‘Wall insulation’ exemption: If the only improvements to your property are cavity, external or internal wall insulation.
- You have obtained written evidence from an expert highlighting that these measures would have a negative impact on the structure of the building. This exemption lasts five years.
- ‘Third-party consent’ exemption: If the relevant changes need approval from a third party, such as a tenant or freeholder, and this cannot be gained. This exemption lasts for five years, or, if the tenant consent is the issue until the tenancy ends – whichever is soonest.
- ‘Property devaluation’ exemption: If making changes will devalue the property by more than 5%. This must be supported by a report from an independent surveyor. This exemption lasts five years.
- ‘Temporary exemption due to recently becoming a landlord’: If you have taken over the property in the past six months, you have a short grace period in which to take action or register another exemption.
You can register an exemption here.
How it differs around the UK
Landlords in England and Wales are required to comply with the MEES regulations, failing to do so could land them in real hot water. However, it’s not the same all over the UK.
Landlords in Scotland are not impacted by the MEES legislation, although commercial landlords north of the border do have to consider similar legislation when working on the energy efficiency management of their properties. Section 63 of the Climate Change Act Scotland 2009 required building owners to improve energy efficiency and reduce emissions across commercial buildings.
How do I get an EPC?
Making sure you are shouting from the (well insulated) rooftops about your property’s energy efficiency is vital, especially as more and more tenants are looking to ‘green living’ and lower energy bills as a key feature in their property search.
But making sure you make the most out of your EPC isn’t as simple as you may think. Your property will be inspected by a qualified domestic energy assessor, who will judge the property against a set of pre-set parameters.
However, there are some top tips to make sure that your assessor is seeing everything your property has to offer, ensuring that your final report accurately highlights your property:
- Make sure your loft hatch is open and the ladder is down: assessors are not allowed to ‘explore’ and can only grade on the evidence that they can see. They don’t know your loft is fully insulated if you don’t show them!
- Provide evidence of recent work, including invoices and receipts – this is an unarguable proof that the work has been done in line with the epc regulations.
- Much as it may drive you crazy, don’t rush to paint over the evidence of cavity wall insulation as soon as the installers drive away. The little holes in the exterior walls are vital proof of the activity, and are great for an assessor to see!
Once the check is complete, the assessor will compile an EPC report for you, and produce your EPC. The main certificate will be added to the register, and the report will be sent to you – most will have suggestions of energy efficiency improvements that you could make.
How to boost your EPC rating
There are many things you can do as a landlord to push this rating up.
- Light bulbs: Switching halogen or non-low energy light bulbs to LED alternatives is a cheap and simple switch
- Pipe lagging: Easy to install, slipping lagging around any visible metal pipes will give you a big green tick when your assessor comes knocking
- Boiler jackets: If you have a stand-alone hot water tank, a cosy jacket (available online or in DIY stores) is a great way to prevent heat escaping.
- Green showers: A power shower is a big selling point for many tenants, so why not offer a water-saving one too? Cheap to buy and easy to fit, a win-win for everyone!
- Loft and roof insulation: relatively simple to install yourself, or cost effective through a scheme, this has a huge impact on heating efficiency
- Replace white goods: Replacing old appliances such as fridges and washing machines with more efficient upgrades will help save a bundle on energy bills
Investments for the long term
- Double glazing: Double, or even triple, glazed windows are a brilliant way to keep a home cosy, and are a huge selling point too.
- Cavity wall insulation: Not viable for all, but a useful undertaking if possible, cavity wall insulation fills the gaps between the outer and inner skin of your property with foam or filler, adding a layer of insulation and warmth.
Get an EPC performance certificate with Howsy
When you join Howsy, EPC certificates are among the list of add-ons you can get on top of our standard service. If you don’t have the time to deal with getting an EPC yourself, we will do it for you for £78 inc VAT. We track EPC expiry dates as part of our property management service, and we will send you notifications to let you know when your EPCs and gas safety certificates are about to expire. You can deal with the renewal process yourself, or we can do it for you.