New EPC Regulations for Landlords in 2025

The Government has recently proposed new Energy Performance Certificate (EPC) regulations that will change the Minimum Energy Efficiency Standard, it's planned to take effect in 2025 and will impact domestic rental properties in England and Wales.

Currently, the minimum energy efficiency standards (MEES) allowed for rented properties to have a E rating on their EPC. However, the new EPC regulation will mean that from 2025, a rented property will need to have a certification rating of C or above. The changes are to ensure homes are more energy-efficient and reduce carbon waste, progressing towards the Government's net-zero targets.

Houses in the UK are generally older than in the rest of Europe and considerable improvements can be made to the energy efficiency in our homes. Such changes will upgrade the EPC rating for private sector homes, reduce energy bills and increase comfort for tenants as homes will be warmer, whilst focusing on reducing the delivery of the statutory fuel poverty target of EPC's by a deadline in 2030. However, these changes will be phased in, starting with new tenancies from 2025 and then all tenancies from 2028 and will apply to all domestic and private rental properties on a lease between six months to 99 years. Indeed, should you not comply, you could face penalties of up to £30,000.

What is an EPC rating? The EPC rating was first introduced in 2007 in both England and Wales. The Energy Performance Certification rates a property's energy efficiency on a scale from A to G, A being the most efficent and G being the least efficient. For domestic and private rental properties it's the responsiblity of the landlord to provide tenants with an EPC rating and at the moment landlords need to get a new EPC every 10 years. Aiming for a low EPC rating can mean lower energy bills and reduce your carbon footprint making your property more attractive to potential buyers and tenants.

How will these new EPC regulations impact landlords? Having to jump from a minimum E rating to a C rating can potentially cost landlords thousands. Landlords will be expected to pay for either insulating their properties to retain heat or use other 'fabric first' features that can help improve heating and lighting. Under the new EPC regulations, if you want to advertise your property for rental from 2025 and onwards, you'll be required to give lettings agents an updated and compliant EPC for the property they are advertising. You will not be able to advertise your property if it does not have a rating of C or above.

After the consultation on 30th December 2021, the Government announced that there will be changes to the minimum energy efficiency standards for England and Wales only. All rental properties will need a minimum EPC rating of ‘C’ or above by 2025. The new regulations will start with new tenancies first, followed by all tenancies by 2028.

What landlord's need to do to improve their rating? Firstly, you’ll need to prepare, especially if your rating is at E to G. You can start by making sure that you have done the following to improve your EPC rating:

1. Improve your lighting to LED light bulbs

2. Insulate the walls and roof

3. Improve windows with double or triple glazing

4. Install an energy-efficient boiler

5. Use a smart meter

Generally investing in renewable energy will help to improve the EPC of your rental property, especially using products such as solar panels and ground-source heat pumps.

What financial help is there to help fund the new EPC regulations? Improving and upgrading your energy sources can be costly. Some landlord associations and regulatory bodies are calling for financial support to help landlords make these improvements to their rental properties.

The Association of Residential Letting Agents (ARLA) believes that the new rules and requirements may not be realistic or achievable for many landlords to meet the standards required.

Landlords and their letting agents have already been impacted by tax changes, and some are struggling to find support to tenants who have covid-19 related arrears.

The ARLA is concerned about the financial impact on landlords and its meaning there will be less rental properties available to tenants who need it.

Now that the consultation stage is complete and the changes to the minimum EPC rating is confirmed, landlords can start working to improve their rental properties EPC rating. You can keep up to date with current EPC guidelines on the government website.