Minimum EPC rating set to rise in 2025

Minimum EPC rating set to rise in 2025 – what do landlords need to know?

Much has been said about carbon emissions and achieving net-zero as of late, with the Government proposing new EPC regulations that will change the Minimum Energy Efficiency Standards in 2025.

The changes demonstrate the direction of travel regarding energy performance standards and are expected to impact domestic rental property in England and Wales.

With further regulation set to come to pass, landlords and their letting agents will need to be mindful of how they manage their properties and consider the necessary steps to improve energy efficiency standards. The government has announced that the minimum Energy Performance Certificate (EPC) rating will be raised in 2025

• The new rating will be an E for all new builds and a C for all other buildings
• The change is being made to help reduce greenhouse gas emissions and improve energy efficiency
• Some people are unhappy with the decision, saying that it will make it harder for people to afford to buy or rent a home
• Others argue that the benefits of the change will far outweigh any costs

The UK Government is looking to raise the minimum EPC rating from an E, which would apply for all new tenancies by 1st April 2025 and 2028. This bill has been designed in order help achieve our country’s commitments within White Paper on Energy Efficiency where it states that we need “to reduce carbon emissions effectively across economy as well as ensuring security of energy supply.

Research reveals privately rented properties, which make up 20% of UK housing stock, are among the least energy-efficient, costing over £6 billion in energy bills in 2018 and producing around 11 megatonnes of carbon dioxide a year.

However, the sector appears to be moving in the right direction, with figures from the English Housing Survey 2019-2020 showing the number of private rented homes in bands A to C in 2019 are up 13% compared to 2009, with 38% of all private rental homes now in this category.

The Sustainable Energy Association has been a significant proponent of the upcoming Bill, with the organisation calling on MPs and Lords from parliament to band together.

What can landlords do to prepare?

Under the current regulations, landlords of properties in EPC band F or G are required to fund energy efficiency improvements up to a cap of £3,500.

However, the Government wants to increase the cap to £10,000, noting that ‘improving private rental sector properties to EPC Band C will require greater investment’.

Government modelling indicates that, on average, most landlords would need to spend £4,700 to bring their properties up to an EPC rating of C.

Therefore, landlords are encouraged to consider long-term solutions for their rented properties. Those looking for ways to bring F and G rated properties up to standards will want to reach a C rating rather than an E.

Similarly, landlords with a property currently rated D or E may wish to consider undertaking works within the next few years in preparation for an amendment in the regulations.

These can include draught-proofing the home, double glazing windows, insulating tanks, pipes, and radiators, and implementing floor and wall insulation.