New Consultation on EPCs and Green Homes Grant

The UK Government have introduced an official consultation on proposals around improving energy efficiency in the private rented sector (PRS).The consultation forms a part of their wider strategy to de-carbonise buildings due to the challenges posed by climate change and they aim to do so by 2030 and at a reasonable cost to the homeowner. The consultation will remain open until 11:45pm December 30thand they plan to respond by next spring.

The proposed amendments to the current PRS regulations do not only aim to raise energy performance standards in the private rented sector but also to bring a series of benefits to landlords, tenants and the environment. The benefits would include decreasing bills for low income and vulnerable tenants, whilst increasing the quality, value and desirability of landlords’ assets. In addition, they aim to reduce energy bills for tenants and ensure warmer homes, reducing carbon emissions to the atmosphere. Further benefits would see investment in high quality jobs and skills in the domestic retrofit supply chain across England and Wales and provide greater energy security through lower energy demands on the grid and reduced fuel imports.

According to the official document released by the Department of Business, Energy and Industrial Strategy, the preferred policy scenario to this effect includes the following four steps:

  • Raising the average Energy Performance Certificate (EPC) rating to Band C; The Energy Performance Certificate (EPC) is a document that indicates how energy efficient a property is by providing estimated energy costs, energy-related performance features as well as recommendations on measures that could make the property more efficient. The EPC grades start from A which means that the property is very energy efficient and may go up to G which is the least energy efficient band. The average EPC rating in the UK is Band D but new build developments tend to have better ratings. Local authorities, however, may roll out fines for rented properties with an EPC below E.
  • Achieving the improvements for new tenancies from 2025 and all tenancies from 2028;
  • Increasing the maximum investment amount, resulting in an average per-property spend of £4,700 under a £10,000 cap; The improvement of PRS properties require a substantial investment on behalf of the landlords but the cap ensures that improvements will be made at a reasonable cost.
  • Introducing a ‘fabric first’ approach to energy performance improvements; That is, to prioritise on measures recommended on the EPC such as insulation, heating and hot water, windows and doors upgrades, and electricity generation measures that reduce the energy demand, lower energy costs and reduce the carbon emission of the building. In this way, the buildings will have an improved thermal performance prior to installation/transitioning to low carbon heating.

The consultation will allow local councils to enforce fines up to £30,000 to the landlords who fail to conform with the energy efficiency targets while encouraging tenants to request energy improvements from their landlords. The Government may introduce further measures in order to achieve their goal of de-carbonising buildings, such as ordering agents and portals to only advertise properties that comply with the new regulations. According to the current timetable first work is expected to be undertaken by the landlords in 2023.

Moreover, the Government have also launched the Green Homes Grant to provide financial support to the landlords that need to improve the energy efficiency of their property. Eligible landlords can claim up to £5,000 to cover the costs of insulation or low-carbon heating instalment. The Government will start issuing vouchers from early November 2020 until 31 March 2021 and improvement should be completed by then. If you are a landlord and your property needs energy efficiency work, it is better to take action sooner rather than later by getting the work done as the Government energy plans are likely to come into force soon!