All you need to know about private rentals and EPC ratings

EPC ratings, or Energy Performance Certificates give a property an energy efficiency rating.

They decide just how efficient your home is and in the United Kingdom, the grading system is A-G.

A is the best grade and G is the worst.

It is important to understand what these mean when you look at buying or renting a property.

EPCs also include recommendations on measures that would make your home more energy-efficient, along with estimated costs for implementing the changes and the potential savings you could make

How does the grading system work?

To start with, a grade is valid for 10 years from the date of issue.

These are needed whenever a property is built, sold, or rented.

In Scotland, it is law to display the EPC within a rental property.

They can most often be found on the meter cupboard, or next to the boiler.

The scores are divided as follows:

• EPC rating A = 92-100 SAP points (most efficient)
• EPC rating B = 81-91 SAP points.
• EPC rating C = 69-80 SAP points.
• EPC rating D = 55-68 SAP points.
• EPC rating E = 39-54 SAP points.
• EPC rating F = 21-38 SAP points.
• EPC rating G = 1-20 SAP points (least efficient)

While these numbers may not seem important on first look, they are actually hugely important.

These numbers can help determine how much your heating will cost you.

Why should you care?

In simple terms, you should care about the EPC rating of a property because it will determine your heating costs.

The lower the score the worse your bills will be.

This is really important to consider when you are looking at private rental properties in the United Kingdom.

When you’re looking to rent a property ensure that you see the EPC rating.

How high does a rental properties EPC score need to be?

This has been highlighted again because there has been a recent change in legislation.

This legislation change requires all rental properties in the United Kingdom to achieve a grade C or higher.

As part of an aim to reduce carbon emissions from buildings, achieve net carbon zero and improve the energy efficiency of homes, there is currently a proposal to reduce the minimum EPC rating for rental properties.

This could move from E to C possibly as soon as 2025. Previously the aim was for these new energy efficiency targets to apply from 2030.

This change is being considered as part of the Minimum Energy Performance of Buildings Bill which is currently being considered by parliament.

Due to a large number of older properties in the UK, it is estimated that around two-thirds of all homes in the UK could have an EPC rating poorer than C and so would not comply.

Are there any exemptions to this?

Currently, some rental properties qualify for an exemption to the minimum EPC rating of E. It is likely that there will also be some exemptions under the proposed new rules.

Exemptions that may be possible include if there is an affordability exemption, if it is not technically feasible to improve the EPC rating or if a party like a tenant or a mortgage lender, refuses consent. Landlords buying a new property also have six months to meet the EPC requirements.

Under current rules, if a property meets the criteria for any of the exemptions you can still let it once you have registered the exemption on the PRS Exemptions Register. An exemption lasts for 5 years

Do rentals in the United Kingdom achieve minimum standards?

Just one third of privately rented homes have an energy efficiency rating of C or above, new data reveals.

Specialist property lenders Octane Capital has said this means just 1.6m homes out of a total of 5m have an Energy Performance Certificate (EPC), which measures a property’s energy efficiency, of C or above.

Having an EPC has been a legal requirement since 2007 but the government now wants all privately rented properties to have a minimum EPC rating of C or above by 2028, but this could be as soon as 2025.

Octane Capital chief executive Jonathan Samuels says: “Many tenants will already be paying considerably higher energy bills than they would in a more energy efficient home and this cost is set to climb significantly higher this year.

“While the government has committed to ensuring new rental homes meet a minimum standard, it’s fair to say they shoulder some of the blame where existing rental properties are concerned.

“The cost to improve a property’s rating to a C is substantial and many landlords simply don’t have the financial resources to do so, having seen the profitability of their portfolio dwindle thanks to legislative changes to tax relief and an increase in stamp duty when purchasing a buy-to-let home.”

We also want to help you to reduce your heating bills. Contact us if you’re struggling with your energy bills, and we will see what we can do to help, as there are various Government initiatives available to help make proprties more energy efficient which therefore helps to reduce fuel bills.

All you need to do is submit an application and one of our advisers will get in touch with you.