Update on Energy Performance Certificates

EPCs are used to measure the energy performance of residential and commercial buildings in both the public and private sectors. Since introduction in 2007, EPCs have been required when a property is constructed or offered for sale or let. The purpose of an EPC is to show prospective tenants or buyers the energy efficiency of a property.

The government has identified that around 3.2 million privately rented properties in England and Wales have an EPC rating of D or below and has committed to upgrade as many as possible to Energy Performance Certificate (EPC) Band C by 2030, where practical, cost-effective and affordable.

Since 1st April 2018, a minimum energy performance standard of EPC Band E is required for domestic private rented properties. The regulations apply to properties let on new tenancies (including renewals), and since 1 April 2020, this applies to all privately rented properties (even where there has been no change in tenancy). Landlords of F and G rated homes are required to invest in improving the energy performance of these properties to EPC B and E.

On 30th September 2020, the government opened a consultation seeking views on proposals to raise energy performance standards for the domestic private rented sector and to amend the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015. The intention is to significantly improve the energy performance of private rented sector homes to increase the quality, value and desirability of properties, reduce energy bills for tenants and ensure warmer homes.

The preferred policy scenario referred to in the consultation, comprises four elements:-

• Raising the energy performance standard to Energy Performance Certificate (EPC) energy efficiency rating (EER) Band C;
• A phased trajectory for achieving the improvements for new tenancies from 2025 and all tenancies from 2028;
• Increasing the maximum investment amount, resulting in an average per-property spend of £4,700 under a £10,000 cap
• Introducing a ‘fabric first’ approach to energy performance improvements.

The consultation is seeking views and feedback on the following:-

• How to ensure energy performance improvements are carried out to a high standard and is considering requiring landlords to choose a TrustMark registered provider or installer for energy performance works.
• How to support the uptake of smart meters in the private rented sector and invites feedback on whether to consider tightening the regulations further in the future.
• How to support and encourage Landlord to comply with the regulations.
• Consideration of enforcement options. The options considered are:

a. Placing a requirement on letting agents and online property platforms to only advertise and let properties compliant with the regulations;
b. Requiring landlords to provide an EPC prior to a property being advertised;
c. Raising the level of the fixed civil penalty fine for offences;
d. Introducing a property compliance and exemptions database;
e. Assisting local authority enforcement through a number of proposals (including enabling them to inspect properties, increasing the maximum financial penalty they may impose on a non-compliant landlord per property and per breach of the regulations to £30,000 and permitting local authorities to use EPC open data for enforcement).

The government is planning to publish the response to this consultation in spring 2021 and plans to amend the current regulations in the autumn of 2021.