With all residential buy-to-let properties currently requiring an Energy Performance Certificate (EPC) of ‘E’, landlords are now facing the harsh reality that all new private rental properties will most likely be required to have an EPC rating of ‘C’ in under 4 years (if the anticipated proposals go ahead). With over a third of landlords having expressed doubts over their ability to meet these standards within the required time frame; these changes could mean a mass exodus of landlords from the market…

What is an EPC?

You are currently required by law to have an Energy Performance Certificate (EPC) when a property is built, sold, or rented. Prior to a property being marketed to sell or rent, an EPC for any potential buyer or tenant must be provided.

EPC’s give properties an energy efficiency rating from A (most efficient) to a G (least efficient) and is valid for 10 years. Landlords can face fines of up to £500 per property if they don’t provably meet the required standards.

What are the concerns in relation to the proposed ‘C’ rating?

Concerns surrounding the new proposals are multiple – and include the inability to finance the improvements (which include things such as boiler replacements, insulation changes and making costly changes to windows and doors).

One portfolio landlord in a statement to This is Money made the following statement:

“Of all the punitive recent legislation and anti-landlord changes, nothing comes close to the impending minimum C rating. It is this alone that will cause me to sell my buy-to-let properties, and I suspect, a large number of others. My properties are old and as such will take a ridiculous amount of money to bring up to a C, even if that were possible, which I suspect it will not be. It is by far the biggest threat to the buy-to-let market and it is within plain sight.” – portfolio landlord statement to This is Money

There have also been concerns expressed in relation to the potential need for tenant evictions to make the changes required, as well as worries over investment return.

How likely is it that the ‘C’ rating proposals will go ahead?

Landlords are understandably confused as to whether they need to start preparing now; as the proposals are not set in stone. However, experts appear to stand in agreement that these changes will indeed take place.

Will there be any financial support in place for landlords to improve their EPC rating?

As things stand now; this is unclear. Whilst there has been government talk of potential grants/loans; the various comments that have been made have been relatively vague. More information on this is expected to come to light after the final bill goes to vote.

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