EPC requirements for landlords scrapped

Those who have been following the Government’s proposed changes to the Rental Reform Bill affecting current EPC targets, may have been surprised to hear yesterday’s announcement to scrap the proposed increase in standards to existing tenancies for 2028.

In our July lettings blog, we reported that Housing Secretary Michael Gove, had given strong indications in an interview with The Telegraph that he was looking to ‘relax the pace’ of the changes as the Government was ‘asking too much too quickly’ from landlords. However, there was always the impression that landlords would need to deliver the improved standard even if the date to comply was pushed back.

With scrapping the EPC requirements the Government has removed the obligation for privately rented properties to reach the C energy efficient rating by 2028 as previously planned. The minimum EPC rating needed to rent a property will continue to be E or above. The government will now look to offer money as an incentive to landlords and homeowners to upgrade their properties.

EPC regulations were introduced in April 2020 in a bid to improve the minimum energy efficiency standards (MEES) of rental properties. Since then landlords have been encouraged to upgrade their property’s EPC rating with many committing thousands of pounds to improvements whilst losing rental revenue whilst changes were made.

For some, the impracticality and costs of making such upgrades have resulted in the sale of their properties. This reduction in stock has pushed demand and rents upwards making it even harder for tenants to find a property they can afford.

Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “The NRLA wants to see all properties as energy efficient as possible. However, the uncertainty surrounding energy efficiency policy has been hugely damaging to the supply of rented properties.

Landlords are struggling to make investment decisions without a clear idea of the Government's direction of travel.

“It is welcome that landlords will not be required to invest substantial sums of money during a cost-of-living crisis when many are themselves struggling financially. However, ministers need to use the space they are creating to develop a full plan that supports the rental market to make the energy efficiency improvements we all want to see.”

Poole Townsend’s Senior Lettings adviser Andrew Sanderson explains: “From a local perspective this u-turn on EPC ratings could be good news for existing landlords. We know many have been considering selling lower rated properties and potential new investor buyers were limiting their choice of potential property purchase as a result of the EPC rating.”

If you would like to learn more about our services or how these proposed changes may affect you and your rental properties, see our dedicated landlord webpages for expert advice and guidance.

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