As part of the Government’s pledge to get the country to net zero emissions by 2050, there are some anticipated big changes afoot for the rental industry where it is proposed that all rental properties will need to reach a minimum EPC rating of ‘C’.
Currently, the minimum energy rating for a rental property is a grade ‘E’ and propositions, as mentioned above, mean that rental properties will need to reach a higher energy standard. Ultimately, this is good news for tenants as it means that their homes will be more energy efficient; helping reduce carbon emissions and lower energy bills.
What Is An Energy Performance Certificate (EPC)?
In its simplest terms, an energy performance certificate provides detailed information about a property’s energy efficiency and carbon dioxide emissions. A few things that are included in reviewing the rating include:
- Windows
- Roofs, walls and insulation
- Boilers and heating systems
- Renewable energy devices (solar panels or wind turbines)
- Lighting
- Fireplaces
- The building measurements
- The year the property was built
Following an assessment, each property is graded from an ‘A’ to a ‘G’ rating and a certificate provided which will last for ten years. The certificate will also outline changes that could be made to improve the energy rating.
What Changes Are Proposed?
It’s important to highlight that these are proposals and not changes set aside in law. There is some confusion about this point, however the lack of certainty is proving unhelpful to the buy-to-let sector.
The proposed changes in the bill are, quite simply that:
- all new tenancies must have an energy efficiency performance of at least EPC Band C from 31 December 2025; and
- all existing tenancies must be at least EPC Band C from 31 December 2028 where practical, cost-effective and affordable as defined under section 1(4).
With 2025 just a couple of years away and a review of EPC on the cards these changes may be some way to go until they are finalised.
What Does This Mean For Mortgages?
When it comes to mortgages, it is probable that some lenders will begin to offer better products where there is a better EPC rating. This is yet another reason to use a broker as doing so will mean you have access to a wider range of products to match your situation.
As highlighted above, the changes are yet to be finalised, however are looming so we will do our best to keep you updated as the bill progresses.
Can We Help?
If you are purchasing a property or a developer needing access to finance and have any questions, then we will be more than happy to help where we can. The FCA does not regulate development finance and we act as introducers for it.
Our team are experienced in providing homeowners and investors with the most suitable mortgage products. You can either call us on 01322 553282 or contact us online.