Upcoming EPC Rating Requirements for Landlords

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In a drive to make rented homes greener and to reduce carbon emissions in the property sector, the government has set out new proposals for EPC ratings and minimum energy efficiency standards.

Here we’ll talk about the current minimum EPC rating requirement and the new proposals, what this means for landlords and how investing in new builds can help you future proof your property investment.

Minimum energy efficiency standards

Recently, the government has proposed new EPC regulations to come into effect for landlords in four years time. Currently, all rental properties in England and Wales must meet the minimum energy efficiency standards of a rating E or better. EPC ratings were first introduced to England and Wales in 2007, and these rate a home’s energy efficiency on a scale of A to G. 

For homes that don’t currently meet the E grade or above, landlords must make energy efficient improvements before a property is tenanted. There is a cost cap of £3,500. This means landlords won’t have to spend more than this amount to meet the standard.

New proposals would require privately rented properties to have a EPC rating of C or higher on new tenancies from 2025 and all tenancies from 2028. The proposals indicate that landlords will likely be required to provide letting agents a compliant EPC for any property that they are going to advertise for rent.

This will likely mean that some landlords with less energy efficient rental properties will be required to spend thousands on each property to reach this higher level of energy performance. In the proposals, landlords would also be required to prioritise improved insulation and other ‘fabric first’ features. 

Currently, the Minimum Energy Performance of Buildings Bill is making its way through parliament. Over the coming months, it will be debated in the House of Commons and House of Lords. The contents could be altered during these debates. At the end of the process, the final bill will go to a vote, which determines if it becomes law.

New-builds have higher EPC ratings

For landlords with new-build properties, EPC ratings are less of a worry. In England and Wales, EPC data shows new flats have a median score of 83, while new houses have a score of 84. Both scores are within the band B.

This means that most new properties already meet the minimum requirements that could come into effect in 2025, making these kinds of properties more attractive for landlords and investors. Investing in a property that already meets these requirements can save a landlord a lot of hassle and allows them to future proof their investment too.

There are a number of other advantages that come with buying new-build properties. Recent research by Leaders Romans Group revealed nearly three-quarters of respondents said they would like their property to be more eco-friendly. This is becoming more important to both buyers and tenants.

Additionally, Prime Minister Boris Johnson recently announced that electric vehicle charging points will be required for new homes and those undergoing major renovations in England from 2022. This will be a building regulations requirement and shows more environmentally-friendly features will likely be required in new properties moving forward.

Salboy creates high-quality, energy efficient properties

Salboy has developed a number of new builds across Greater Manchester and follows modern standards with the highest EPC ratings. We prioritise high standards and future-proofing developments.

Our new builds have been designed in the era of high scrutiny, so you can invest with more confidence. At Salboy, we have delivered over 2,400 properties, including five developments in the last year, and are experienced in dealing with modern energy efficient standards.

You can check out the thousands of new builds Salboy has created and developed that are highly energy efficient. If you are interested in buying a new or off-plan property, call us on +44(0) 161 884 3183 or send us a message online.

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