Labour Announces Minimum EPC Ratings for Landlords

The minimum EPC targets are back. Here, we review Labour’s energy-efficiency plans for the PRS and what this means for your properties.

Ed Miliband, Energy Security and Net Zero Secretary, has confirmed the new energy-efficiency plans for the PRS: Landlords must increase their rented properties' EPC rating to a ‘C’ or above by 2030 or be barred from letting them out.

Miliband announced these plans to the Commons, stating, “One thing that this Government will do that the last Government did not is demand that landlords raise the standard of their accommodation to a proper energy performance certificate standard C by 2030.”

The move, which is said to support more than three million people facing fuel poverty, mirrors the original proposals from the Conservative government. These plans, scrapped in September of 2023, would have required all landlords in England and Wales to have C-rated investment properties by 2028.

Energy Assessments

Just before the election, consultations and training had begun to reform how properties are assessed for energy efficiency. The new Home Energy Model was set to focus on carbon emissions rather than the efficiency of heating a building using gas.

This new Model would have been a drastic improvement for landlords, offering more in-depth assessments and accounting for the benefits of electrical heating systems that have outdated the current EPC system. However, it's unclear whether plans to overhaul the current EPC model will continue under the new government.

Exemptions and Spending Caps

The sector also requires transparency on exemptions, spending caps, and further funding or support for landlords when making these improvements. Under the Conservatives' plans, a £10,000 spending cap was proposed.

This would have impacted landlords disproportionately, with those letting out homes in London set to benefit more than those with properties in the Northeast. Furthermore, research from specialist lender Shawbrook revealed the average total spend from those who had already done the necessary work is £25,148.

Industry Response

The NRLA has quickly responded to the reintroduction of these energy-efficiency targets. Meera Chindooroy, the Deputy Director of Campaigns, Policy, and Public Affairs at the NRLA, commented:

“Creating energy efficient homes is a win/win – tenants have cheaper bills, and the property is more marketable as a result. However, the costs to get some homes, typically older properties, to a C grade is, quite simply prohibitive for smaller landlords.

“Our research shows that, contrary to popular opinion, most landlords are not property tycoons with money to spare, and with improvements potentially costing tens of thousands of pounds, it is essential that the government comes up with a plan that will work across the country.”

Landlords need sufficient time and support to prepare to undertake the necessary improvements to their properties. 2030 may sound far off now, but landlords must account for the upgrades' costs and the time it will take to complete. The sooner the government publishes clear guidelines, the more achievable this goal will be for the sector.

Article taken from Mortgage Finance Brokers Online