Landlord Knowledge - The Home of Savvy Buy to Let Property Investors

EPC Changes Still Set for April 2018

Hopes that the planned changes to EPC legislation would be delayed and not implemented in April 2018 have been dashed, by announcements that it will become law in April 2018; from that time, properties offered for new tenancies must have a minimum grade E for energy performance. 

The EPC legislation will apply to all, including existing tenancies by 2020, even if the tenants are quite happy with their properties. As it is believed that 330,000 privately rented properties are currently rated F and G, it is easy to see that it will create some difficulties in ensuring all properties reach the required standard by the specified time.

Many landlords have been preparing for this, taking advantage of various ‘Green Deal’ offers to improve insulation, with more energy efficient boilers and additional loft and cavity wall insulation; as window frames and doors have needed replacement, double glazed units have been installed, which cut-out draughts and improve security, (though often bringing with them issues of condensation which did not occur in draughty homes).

We are now draught free and perhaps at a more constant temperature. The newer the property, the better the standard of energy efficiency, so should be at or close to the appropriate level, but what of older properties?

18%, or nearly one in five private rented properties were built prior to 1919 and the massive social housing programme that made the ‘Homes Fit for Heroes’ Lloyd-George campaigned for. Pre-1919 there were no cavity walls and this makes these properties difficult to insulate to the same standard as their more modern counter-parts.

External insulation is possible, where a covering is applied externally, thus providing a cavity which can be insulated. This is an expensive process, far in excess of standard cavity wall insulation, and whilst some will like the change this makes to the exterior, others may be unhappy that the character of the original terraces or semi-detached is lost. Changes to the interior to provide insulation are possible, but are difficult whilst a tenant is in residence and will slightly reduce the dimensions of the room.

Landlords with listed properties have less cause for concern – they will be excused the requirement to meet an EPC standard of E, provided they can show that they have done everything that they are allowed to, to improve the energy performance of the property; that may mean providing evidence that they have done whatever they can to improve the comfort of the tenants.

Many landlords will already have done what they can to improve their properties and their tenants are enjoying the benefit of lower heating bills and more comfortable properties. For those that have not, with thousands of properties at an F or G, there may be difficulties ahead. 

No new tenancies can be granted to anyone after April 2018 where the property does not meet the minimum standard, so rent losses are probable as properties are left void, pending the necessary works being undertaken. It is good news for tradesmen, who will find that they are in high demand over the next 7 months, as landlords struggle to bring their void properties up to standard. Bad news for landlords, who may find that their charges rise accordingly and live with the pressure and expenses, of improving energy performance.

Any legislation which seeks to improve living conditions for tenants and property standards for landlords, should be welcomed and viewed positively. Unfortunately, the well-meaning ideas of the legislators are often not allied to the day-to-day issues of resolving the situations of the properties.

Perhaps some leeway with introduction of the changes for existing tenants may be more realistic and be accepted more easily by landlords, who are concerned about tenants and do want to do what is best for them, but may not have the time or the money to do them in such a short time-scale. 

For advice on buy to let issues – General Knowledge