EPC requirements for rented properties: what landlords need to know
At a glance: Landlords generally need a valid EPC before marketing a rental property, and most rented homes currently need a rating of E or above unless an exemption applies. The requirements are expected to become stricter, so landlords should check their property’s current rating and plan ahead for future improvements.
Energy Performance Certificates (EPCs) are an important part of the legal requirements surrounding rented property. They provide information about a building’s energy efficiency and give it a rating, helping tenants understand how energy efficient a property is likely to be.
When does a landlord need an EPC?
Before a property is marketed for rent, the landlord or their agent must make sure that an EPC has been commissioned. The property’s EPC rating must also be included in any advertisement for its rental in commercial media, and the certificate must be provided to the person who becomes the tenant. These requirements apply to a range of residential tenancies, including assured shorthold tenancies, regulated tenancies, assured agricultural tenancies and the new periodic tenancies introduced under the Renters’ Rights Act.
When is an EPC not required?
There are, however, some situations where an EPC is not required. These can include certain buildings that are officially protected because of their architectural or historic importance, where complying with energy-efficiency requirements would unacceptably alter their character or appearance. Places of worship, temporary buildings intended to be used for two years or less, some industrial or agricultural buildings with low energy demand, and stand-alone buildings with a useful floor area of less than 50 square metres may also fall outside the requirements.
What is the minimum EPC rating for a rental property?
For most rented residential properties, the key requirement is that the property must have an EPC rating of at least E. It has been unlawful to grant a new tenancy of a property rated below E since 1 April 2018, and the rules were extended to existing tenancies from 1 April 2020. This means that a landlord should not continue to rent out a property where there is no valid EPC or where the property has an F or G rating, unless an exemption applies.
What EPC exemptions are available to landlords?
You are not required to spend limitless sums of money to get a property rated. A number of exemptions may be available where it is not reasonably possible to bring the property up to the required standard. Landlords are currently required to spend up to £3,500, including VAT, on relevant energy-efficiency improvements. If the property still cannot achieve an E rating after all suitable improvements have been made within that limit, an “all relevant improvements made” exemption can be registered. There is also a “high cost” exemption where even the cheapest recommended improvement would cost more than £3,500. These exemptions generally last for five years, after which the landlord must reconsider whether further improvements can be made.
How are EPC requirements changing?
The position is also expected to become more demanding in the future. The Renters’ Rights Act does not change the EPC requirements immediately, but from 2028 newly let properties will need an EPC rating of C or above, with all rental properties will be expected to meet the C standard by 2030. The spending cap for improvements is also set to rise to £15,000, or £10,000 in lower-rent areas.
For landlords, the practical message is clear: check the EPC position before marketing a property and start thinking ahead about how you will deal with the changes to come.
If you have any questions, please contact John.Grace@mogersdrewett.com
John Grace – Head of Risk & Compliance, Disputes & Compliance