Guide to Energy Performance Certificates for residential and commercial landlords

06 Jul 22

There is increasing pressure to reduce the UK’s carbon footprint and the Government is legislating to ensure Energy Performance Standards for both residential and commercial properties improve.

The regulations differ for residential and non-domestic stock, however, the requirements are becoming ever more rigorous in both sectors.

Residential EPC requirements

Currently, a residential property available to let, must have a minimum of an ‘E’ rating for its EPC, however, under consultation is an even higher standard from 2025 which if implemented would require a minimum ‘C’ certification on all new lettings from that date. Concerns regarding the costs associated with achieving this improved certification is one of the main factors driving something of an exodus from the market by private landlords. If these proposals are made law, the impact on the levels of available stock within the private rented sector is likely to be significant, and such a change is also likely to trigger higher rental values.

There will be some exemptions, but these are limited and owners of property which are currently rated ‘D’ and ‘E’ are recommended to take steps to improve the energy efficiency of their property in good time.  Simple improvements include the following:

  • Upgrade lighting to LED light bulbs
  • Insulate walls and roof
  • Improve windows with double or triple glazing
  • Install energy efficient heating

Commercial EPC requirements

It is currently a legal requirement that commercial buildings must have a rating of at least an ‘E’ before they can be offered ‘to let’.  With effect from the 1st April 2023, this requirement will be extended to existing leases, meaning that landlords cannot continue to let or sublet a commercial property with an EPC rating of ‘F’ or ‘G’.

If you own commercial property, you should check your EPC rating and begin taking steps in connection with any marginal properties which have a rating of ‘D’ or ‘E’.

The 2020 Energy Whitepaper indicated that by 2030 the Government hopes that all properties will attract ratings of ‘B’ or better.   By way of an interim step a Band ‘C’ milestone in 2027 is also proposed, meaning all commercial leased buildings must be improved to no less than an EPC Band ‘C’ by the 1st April 2027 or register a valid exemption.

There is very little prospect of any relaxation to the above proposals, and we strongly recommend that owners implement the measures needed to ensure compliance in good time.

If you are a residential landlord and need advice on letting your property, please contact our team on 01206 764499.  For landlords of commercial premises looking for advice on any aspect of leasing property, please contact our Commercial team on 01206 854545.

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