One of the elements of the particulars listed in the properties we sell or let is its Energy Performance Certificate or EPC. However, in the past couple of years, there has been a tightening of the standards in this area; what was acceptable before may not be now. There are further changes on the way as well.

Here, Maunder Taylor, who offer property investment management services in North London and parts of Hertfordshire, look at the current state of play with EPCs.

What are EPCs?

EPC ratings go from A (the most efficient) to G (the least efficient). The assessment looks at elements ranging from insulation, heating systems and windows, and provides recommendations for improving the property’s overall energy performance, along with cost estimates and potential savings this would mean on your annual energy bills. Each certificate is valid for 10 years, although there are suggestions that this should be reduced to five years.

EPCs are currently calculated using what is known as Standard Assessment Procedure (SAP) Calculations. However, the Government intends to replace this method with the Home Energy Model (HEM) as part of the Future Homes Standard. This will involve more regular ‘snapshots’ of the property’s thermal efficiency (or lack of it), as well as taking account of smart technology.

The overall objective of EPCs is to cut the size of people’s fuel bills, and to reduce the UK’s carbon emissions to help attain the target of ‘net zero’ by the year 2050.

Domestic (Non-rental) Properties

EPCs are mandatory for any buildings which are being sold (or rented), as well as for any new-build properties. And if any building is converted or undergoes a change of use, and this involves making alterations to the heating, air conditioning or ventilation systems, then an EPC may also be required.

There are one or two exemptions. For instance, listed buildings, small properties, temporary structures and those which have a very low energy usage may not need an EPC.

At the moment, there is no minimum EPC grade required when selling a house. This, however, is not the case for rented accommodation.

Rented Accommodation

By the year 2030, the minimum EPC rating for rental properties will be C (currently it is E). New tenancies will have to comply with this new standard by 2028, and all remaining rented properties by 2030.

This could have knock-on effects for both landlords and tenants. The former may have to pay for any necessary improvements (current estimates put this at more than £6,000 per year). And while the tenant may benefit from lower fuel bills, they may find the rent has increased to pay for the cost of any upgrades.

You should always check the terms of the lease to see who is responsible for meeting the cost of any improvements.

Commercial Premises

EPCs apply to shops, offices and other businesses as well as residential properties. From April 2023, all commercial premises needed to have an EPC rating of Band E or above. Not meeting this standard means landlords could face fines of up to £150,000.

There are proposals to make this more stringent in the future, with businesses required to have a Band C rating by April 2027, and Band B by April 2030.

And if you don’t have a CEPC (commercial EPC) at all, then you could still be fined £5,000 or a percentage of the property’s rental income.

Maunder Taylor – Specialists in Property Investment Management in North London

If all this sounds difficult, then don’t worry. At Maunder Taylor, as part of our marketing services, we can organise the required energy performance certificate (EPC) on your behalf, whether you are intending to buy, sell, rent out or invest.

We also offer commercial premises for sale or rent, as well as operate a traditional estate agency, with our main office in Whetstone. If you’d like to get in touch, you can follow this link or call us on 020 8446 0011.