Does your EPC rating really matter?

Whether you’re a landlord or homeowner, energy efficiency matters. It’s good for both the environment and your wallet - but what role do EPCs play in this?

As a landlord, there are several reasons why you need to have an energy performance certificate (EPC), and why you should pay attention to what your rating is. If you own your home and don’t let it out, different rules will apply, but it’s just as important to understand why your EPC rating matters.

While current regulation is focusing on landlords, changes across the board are coming and it’s best to be prepared for them.

EPC regulation and law

In October 2008, government regulations came into force that stated all properties had to have an EPC before being marketed to rent. Since 2013, it has been a legal requirement for all rental adverts to clearly show the property’s EPC rating. 2015 saw new laws set by the Minimum Energy Efficiency Standards (MEES), which stated that all rented properties must have a minimum EPC of E or above.

In the UK, EPCs are required by law for both landlords and homeowners who wish to sell or rent out their property. For landlords, your property must have an EPC rating of E or above in order for you to legally rent it out to tenants. For homeowners, getting an EPC is mandatory when selling your property. While it is not currently a legal requirement for homeowners to improve their property’s EPC rating, doing so can help increase the value of your home and reduce the impact it has on the environment.

Upcoming changes to regulations

From 2025 onwards, any new tenancies in the UK must have an EPC rating of C or higher. This requirement will also come into force for existing tenancies from 2028.1 Failure to comply with this without registering for exemption could see hefty fines heading your way.

It’s important to note that the costs involved with upgrading a property lie solely with the landlord and cannot be moved on to the tenant. While it may be possible to recover some costs through service charges, landlords must bear the primary responsibility for ensuring their properties meet the required standards.

As it stands, homeowners will need to meet these expectations too, though the current proposed deadline for this is 20352. As many as 15 million homes in the UK could need improvements3, and with around 25 million properties in England and Wales, this means that about 60% of the total housing stock may need work to meet these requirements.

The benefits of improving your EPC

While improving your EPC will very much be non-negotiable in the coming years, it’s important to acknowledge that there are benefits to doing so, whether you’re a landlord or homeowner.

Since these changes came into force, EPC ratings have been a major consideration for tenants looking for a new house. Having a good EPC rating could therefore tip the scales in your favour if a prospective tenant is weighing up their options.

Improving your property’s EPC rating as a landlord can have several benefits beyond simply meeting regulatory requirements. A big draw when investing in property is the prospect of future proofing your finances, and improving your EPC can help you boost that investment. By making upgrades to your property’s insulation, heating, and other energy systems, you can improve the environmental impact of your property and appeal to tenants who are looking for more sustainable options.

If you live in the property, you could see even further benefits in energy efficiency, saving on average around £400 per year by moving from a D to a C4. For those moving from an E to a C, that could climb to just shy of £1,000.

Furthermore, in comparison to a G rating, improving your EPC rating to an A or B could see you increasing the value of your property by 14%5.

How to improve your EPC rating

There are several ways to improve your EPC rating, but it’s not a one-size-fits-all solution, and you’ll need to make considerations for improvement based on your home’s needs. Check out our article that discusses not only what you can improve, but how much it could cost you.

In terms of paying for energy improvements, you can look at programmes like the Green Homes Grant, or consider a remortgage to free up equity for a retrofit. You may even be able to remortgage into a green mortgage, which comes with its own benefits and incentives.

Working with an expert

It’s important to weigh up the costs and benefits of making upgrades to your home. If you’re planning on remortgaging to pay for renovations, get in touch with one of our expert mortgage advisers before making any major decisions.

We can offer tailored advice suited to your circumstances and help you find a solution that is going to work for your individual needs.

You may have to pay an early repayment charge to your existing lender if you remortgage.

Your home may be repossessed if you do not keep up repayments on your mortgage.

There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

1Summit Environmental, 2022
2GOV.UK, 2023
3This is Money, 2022
4Knight Frank, 2022
5MoneySupermarket, 2022

Because we play by the book we want to tell you that…

Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

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