New EPC rules will be introduced in 2025, ensuring all newly let properties in the UK meet an EPC rating of ‘C’ or above.
Since the introduction of EPCs for rented properties in 2008, gradual changes have been made to encourage UK landlords to increase energy efficiency in their investment properties.
First came the Minimum Energy Efficiency Standards (MEES) in 2018, which required that all properties being newly let or re-let in England have a minimum EPC rating of E or above. Then in 2020, the MEES would apply to all tenancies, not just upon new lets or renewals—and now the push to drive up energy efficiency in rented properties continues.
From 2025, all newly rented properties will be required to have an EPC rating of C or above, and the rollout to introduce the requirement to all tenancies (rather than just at renewal) is expected to start in 2028.
The government’s proposals regarding the Energy Performance Certificate (EPC) rating of rental properties in the UK aim to improve energy efficiency and reduce carbon emissions. While these proposals may initially cause some anxiety among landlords due to the short time frame, they are ultimately a necessary step towards a more sustainable and cost-effective property industry.
In addition to the financial benefits, there are several other advantages to enhancing the energy efficiency of rental properties. These improvements support the government’s environmental commitments by contributing to the overall goal of reaching net zero carbon emissions by 2050. Currently, the average UK home produces around 8.1 tonnes of Co2 each year, which, when combined across the country, accounts for approximately 26% of the UK’s Co2 emissions.
Energy-efficient properties are also more attractive to tenants, providing a comfortable living environment with lower ongoing costs.
New Build vs Upgrade – Which Is More Affordable?
For landlords with older properties, retrofitting can be a costly exercise. Therefore, many landlords are now setting their sights on new build properties when considering adding to their portfolios.
New homes often have the latest energy-saving or smart build technologies as standard, meeting the new MEES requirements by default.
However, for those with older properties, upgrading to eco-friendly additions such as heat recovery systems, solar panels, and energy-efficient lighting can help to bring properties up to the new standards. It’s also crucial to ensure that properties have eco-friendly insulation.
While initial costs may be associated with upgrading properties to meet the new EPC regulations, these expenses can be offset by long-term energy savings and potential increases in property value. In addition, it’s proposed that more grants and funding may become available for landlords ahead of the new requirements. Currently, the cap on energy performance investments sits at £3,500. However, it is thought that this could be raised to as much as £10,000.
Landlords should look to the new EPC rules in 2025 as an investment in the future sustainability and profitability of their properties.
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