Your Rental Is EPC D or E? Here's What 2030 Means

Every privately rented home in England and Wales needs to reach EPC Band C by 1 October 2030, with a cost cap of £10,000 per property. If you own one rental or a portfolio, the planning window is open now.

In this episode Simon Bacon and Ian Sadler take 20 questions on EPCs and answer them in plain English: what the minimum standard is today, what to do if your property is rated D, E, F or G, how the cost cap and exemptions work, which improvements actually move a rating, whether a tenant can refuse access for works, and the timing question most landlords miss, which is whether to renew your EPC early and lock in a C before the assessment methodology changes.

Simon Bacon is the owner of Preferential Properties, a lettings and sales agency serving Sutton Coldfield and North Birmingham with over 17 years in property management. If you want to talk through what EPC C means for your property, get in touch at prefprop.com.

CHAPTERS 

0:00 Cold open 

0:24 Welcome 

1:45 The minimum EPC rating to let a property today 

2:12 Can I let a property rated F or G? 

2:40 Do I need an EPC to market my property? 

3:17 How long does an EPC last? 

3:42 Do I need a C rating right now? 

4:18 Has the government confirmed EPC C for rentals? 

5:24 Should I start improving my properties now? 

6:28 Is EPC C already law, and when does it take effect? 

7:48 My property is rated D: what now? 

8:47 What if it's rated E? 

9:18 Rated F or G: the urgent cases 

10:01 The current cost cap 

10:34 The £10,000 cost cap explained 

12:06 Which improvements raise an EPC rating most? 

13:20 Already a C: do I need to do anything? 

14:55 Should I renew my EPC early? 

16:35 Access, tenants and improvement works 

17:37 Exemptions under the new regime 

19:00 EPC C is coming: the summary

______________________________

Get in touch with Simon for all your property needs. 
www.prefprop.com

E: simon@prefprop.com

T: 0121 2402244

Transcript

SPEAKER_00 0:00

Hello and welcome to the All Things Property Podcast with me, Sam Bacon, and me is Adler. So today we're going to continue our theme of uh 20 questions and today we're going to consider EPC's and EPC Band C by 2030, what every landlord needs to know now. Welcome to the All Things Property Podcast with me, Simon Bacon of Preferential Properties. Every week, Inside of an I will delve into all things property. We'll guide you through with friendly, no nonsense advice. So, with the government confirming its intentions to require privately rented companies to achieve the equivalent of an EPCC by the 1st of October 2030, we've had many landlords asking what they need to do, what they need to do it, and how much it is likely to cost. So let's put some framework around this. So the current legal minimum standard remains EPCE, but there is no doubt the direction of travel is towards higher energy efficiency standards. The landlords who understand their portfolios now are likely to be in a much stronger position than those who leave it until the last minute. So let's go through some questions in that maybe helps to clarify for landlords what that all means. Okie dokie. Right. What is the current minimum EPC rating required to let a property? So the current legal minimum standard for most privately rented properties remains an EPC level E. Unless a valid exemption certificate has been registered, landlords cannot let a property with an EPC rating of F or G. Can I let a property with an EPC rating of F or G? As I've said, generally no. Not unless they have a valid exemption. And not only do they have to have a valid exemption, it has to have been registered on the PRS Exemptions Register. Yet another example of compliance and monitored compliance. Do I need an EPC to market my property? Well, the answer, as we all know to that, is a resounding yes. Normally an EPC should be commissioned for properties marketed for rent and the rating must be included in property advertisements. What that also means is that if during a tenancy the EPC expires, you do have to renew the EPC. It's good to see that you're putting so much feeling into these answers. Thank you very much. What could be perceived to be a fairly boring subject, wasn't it? Yes, absolutely. How long does an EPC last? Okay, so an EPC remains valid for 10 years from the date of issue. It doesn't mean that you can't commission or organise an EPC at any other time during those ten years, especially if you have carried out improvements. Do I currently need an EPC rating of C? No, you don't. As of today, landlords only need to comply with the current minimum standard of EPCE. I seem to be covering answers questions twice. Keep going because they're the same. We're just reinforcing certain aspects of it. So it's not waffle then. No, in and given that you wrote the questions, you would have to question why you're asking. Well, I'm asking myself the question. Are you? Okay. That's to be age, then, won't it? Again, it's twice as used as that. Yes. Carry on. Has the government confirmed EPCC for rental properties? Yes. The government has confirmed its intention to require private rented properties to achieve the equivalent of EPCC by the 1st of October 2030, subject to exemptions. And I think, you know, it's interesting you asking, you saying that Ian, in terms of well, I seem to be, you know, asking the same questions. Well you're not, but the questions are perhaps nuanced to reinforce where things are now and where things are going, and that's the confusion. That's why, you know, your confusion there really demonstrates the confusion by landlords of well, what have I got to be doing? So, anyway, sorry, interlude, carry on. Just a quick one. If you feel he's being really mean to me today, put a note in the comment section, please. Don't worry, I'll put a comment in when we finished. Number seven. Do I need to start improving my presentation skills? Oh, sorry, no. Uh do I need to start improving my properties now? Probably is the honest answer. Um, I mean, whilst EPCC is not yet a legal requirement, landlords with a D and E rated properties should in reality be reviewing their portfolios now. Waiting until you know just before the legislation comes in could result in you know increased contractor cost because contractors know that that work's going to have to be done, longer waiting times because contractors may well be busy, reduced availability of trades, greater financial pressure. So, yeah, I would say you know, between now and 2029, it probably is a good idea to be, you know, at least understanding your EPC rating and know am I going to have to be doing something in the future or is my property going to be alright? So the risk of repeating my questions is EPCC already law? No. No. The fact that the government have indicated that they are going to be introducing an EPC rating C by the 1st of October 2030 does not make it law. The policy direction's been confirmed, but the detailed regulations are still being implemented. So to clarify, the current legal minimum requirement for an EPC is a band E and above. And for further clarification, when will the EPCC requirement take effect? The target date, it's a target date, 1st of October 2030. Expand on target date, why do you say that? Because until it becomes into legislation, there is still the ability that it could get changed. Yeah. Not maybe not the time to discuss the effect this could have on the rental market supply, but not at the moment. Okay, right. Will new rules apply to existing tenances? Yes. The intention is that all privately rented properties meet the standard by the implementation date, not just newly let properties. And what happens if my property is currently rated D? Uh you can continue letting it, um, provided the EPC remains valid. Um, but I think we've we've talked about it uh in one of the other questions, which was landlords probably should begin identifying what improvements may be required to reach EPCC. I know as a business it's something that we are actually going to be looking at over the next six to nine months. Um we're letting the impact of the Renters' Rights Acts just consolidate themselves. But it the you know one of the measures that we will be doing for all of our landlords is getting in touch with them where their energy rating for their properties are less than a C, even though they're currently compliant, so they can you know we can try and work together to decide how best to you know meet those new requirements. What happens if my property is currently rated E? Okay, well that's even worse than a D, but you can still continue letting it. Um I would say though that the E-rated ones are going to uh probably require the most attention and you know the priority would be dealing with energy rating E rather than energy rating D. But yes, it's very much a case of uh you know focus on those. Continuing on the same theme, what happens if my current problem if what happens if my property is currently rated F or G? Okay, then it cannot be let. Um and if you are currently letting a property with uh an EPC that is an F or a G, then um you know you have some problems and you must improve the property to EPCE or register a valid exemption before letting it. And in fairness, we do have a number of um of those where they are F and G still able to be let because we have done we have gone down uh the exemption route and registered it on the uh exemption database. What is the current landlord cost cap? My understanding is that the current cost cap is three and a half thousand pounds, including VAT, when seeking to comply with the existing EPCE requirements. So as long as you have spent your three and a half thousand pounds, if you haven't been able to get it above um the e-banding, or get it to an e-banding, then you would be entitled to an exemption. And what is the proposed future cost cap? Well, this is one of the biggies, isn't it? So the government has confirmed a future cost cap £10,000 per property under the proposed regime. Now, again, that's not law, that's not legislation, it's a proposal, and that's what they are looking at. Yeah, quick comment, I just cannot see it staying at £10,000. No, neither. Well, I think that then becomes a slight political issue, doesn't it? And uh where does Ed Miliband go? Will will that um will the change of government um personnel have an impact on on any of this? I don't know. Okay. What if I spend the cost cap and still cannot reach the required rating? Okay, I'll probably cover this off earlier. You may be entitled to register an exemption. The exact exemption process will depend on the final regulations, but the intention is that landlords should not be expected to spend more than the prescribed cap. Yeah, if they bring the cost cap back down again to something more manageable, then you know that that may have a real impact for for landlords. But yeah, you know, we're talking hypotheticals at this moment. Not so hypothetical in my opinion. What improvements are most likely to improve my EPC rating? Oh gosh, uh, how long is a piece of string? I would have said most common improvements are probably going to be loft insulation, uh, cavity wall insulation, upgraded boilers, heating controls, smart thermostats, double glazing, secondary glazing, hot water cylinder insulation, solar panels, low energy lighting. Um it would vary from property to property, but what I would say in that list I've just read out, you know, to put in you know, to insulate your hot water cylinder, if that's going to help move you, that's relatively low cost. Um, you know, double glazing obviously is going to be a much bigger cost. So there will be in any EPC, there will be a schedule of improvements that will impact your rating and what the likely impact of that work will be. So, you know, it it's worth certainly worth looking at that and see what low-cost work you you can get done. Okay, my property is already EPCC. Do I need to do anything? Probably not. And the reason I say probably not is if it already has a valid EPCC or above, it's likely to comply with future requirements. However, that depends on whether those requirements change and whether the assessments for EPCs change, and there is talk that the assessment methodology will change. Um, so again, you know, I would I would say that it's worth keeping your EPC up to date if you are at a C level before the regulations change in case the assessments change. Which properties are likely to struggle to reach EPCC? Wow, I think we know all of these in Victorian properties, older terraced houses, listed buildings, um, rural properties off the gas network. We've got a few of those properties with older electric heating systems, so really it tends to be the um the older out-of-the-way properties, I would have said, but also you know, the the terraced houses in in town centres as well can often be um you know dated even though they are you know have been modernised to to some extent with kitchens and bathrooms. Should I get a new EPC now? Um if your EPC is approaching expiry or significant improvements have already been carried out, could well be worthwhile, um, may provide a clearer picture of what works are required. Um yeah, worth thinking about. My EPC expires in 2027 or 2028. Should I renew it early? I would say in many cases, yes. Um, an updated EPC may reflect improvements already completed and assist budgeting for 2030. And if you know you've managed to get it to a C, then that the life of that EPC will remain valid even if, as my understanding is at the moment, if the assessment methodology changes, any EPCs that are in force at an EPCC will be valid even though the methodology changes. The methodology will only happen for EPCs that are newly undertaken. So it's a it's a gamble, really, isn't it? You you get to 2027, 2028, and you think, is my property a good C? Is it like to slip into a D? Yeah. Do I want to buy myself seven extra three years or exactly? Yeah, absolutely worth considering, and definitely, you know, one of the things EPC ratings are something that all landlords should start to consider. Anyway, next question. Okay, this we're into bonus questions now, by the way. Do I need to evict my tenant? It's a bit harsh, to carry out EPC improvement works? It's it's a question that could be asked. Not usually. Most EPC improvements can be completed whilst the tenant remains in occupation. And can a tenant refuse access for EPC assessments or improvement works? Okay. Generally no. Um, provided a reasonable notice being given, tenants should allow access for inspections, EPC assessments, improvement works. Again, landlords can't enforce entry for non-emergency works, but repeatedly refusing could be deemed a breach of tenancy. So it's in everybody's interest, isn't it? To uh and I can't see many tenants not allowing a landlord to uh put in double glazing or update their boiler or anything else like that for improvements. Almost done. Will there be exemptions from EPCC? Yes, uh the government has confirmed exemptions will continue to be available in certain circumstances, which includes you know where the works you see to cost cap, um, where the improvements are not technically feasible, um, and if the works would significantly reduce the value of the property, there will be other reasons for exemptions, but they are the uh the main ones. Okay, and a big question and the final question: what should landlords be doing now? Um I think at the moment landlords should be checking the EPC rating of their properties, um, identifying all the DE rated properties, review the expiry dates, obtain indicative costs for improvement works if they're going to be required. Importantly, budget for compliance, keep up to date with government announcements and consider obtaining updated EPCs where improvements have already been completed. So, thank you very much for those questions, Ian. Maybe if I can just summarise then the five key takeaways from this episode. One, the current legal standard is still EPCE. EPC is EPCC is coming. That's quite a mouthful, isn't it? EPCC is coming. The government has confirmed its intention is to introduce EPCC by the 1st of October. Future cost cap is 10,000. D and E rated properties need attention. And finally, start planning now. If you have any questions relating to your EPCs, then please do give us a call and we can talk them through. Thanks for tuning in to this week's episode of the All Things Property Podcast. If you found this episode useful, don't forget to subscribe, like and share. These things really help us reach the people who need to hear this advice. See you next week.