EPCs: Clarity key once consultations conclude

If a week is a long time in politics, three years is practically a lifetime. In fact, we have had three prime ministers since the government published its consultation paper ‘Improving the energy performance of privately rented homes’ in September 2020. And we’re still in consultation. A third white paper on the topic, initially expected this Spring, is now hoped for by the end of the year.

Hundreds of articles have been written during those three years, speculating about what potential EPC rules might require of landlords and when. But we are no closer to knowing than we were when that initial consultation ended in January 2021.

There is still no mandated deadline for upgrading residential buy-to-let property to a minimum Energy Performance Certificate rating of C, and recent suggestions that a target date of 2028 could be imposed is pure conjecture.

There are only two EPC rules relating to residential buy-to-let property.

Firstly, Since October 2008, all rental properties in England and Wales have been required to have an energy performance certificate (EPC). And secondly, since 1 April 2018, all properties being let, or sold for the purpose of letting, have been required (under the Minimum Energy Efficiency Standards) to have a minimum EPC rating of E or above.

No other regulations or dates have been decided on since.

Yet, in spite of the lack of clarity on official future energy efficiency requirements, recent studies carried out by buy-to-let lenders indicate that healthy numbers of landlords are already upgrading their properties, as they know it makes good business sense in attracting tenants and practical sense in improving the quality of their bricks and mortar investment. But such activity does tend to be concentrated more around those portfolio landlords who can better afford the often significant costs of energy efficiency improvements than their smaller counterparts.

Of course, many landlords will need help in upgrading their properties. Whether that comes in the form of government support, tax relief, innovative mortgage products or a combination remains up for discussion. Exemptions also need to be defined. Then there is the small matter of EPC accuracy to be addressed. And sufficient labour and materials to find... the list goes on.

Decarbonising as much of the UK’s property as possible is of course the right thing to do, but it is an enormous undertaking and a complex area which will require the buy-in of multiple parties, not just landlords but owner-occupiers, lenders and insurers, working closely with a fully committed and focused government. It is likely to be the work of many decades.

In the meantime, with a general election likely to take place next Autumn, the current administration has a long ‘to do’ list, and EPC targets may not be a priority. Whenever – and whichever – government does start to make real steps on the long and winding road to lower property emissions, it will need to bring many people along on the journey, and to set out very clear signposting at every stage.