Will your property survive the energy test??

For landlords that are not aware it is now less than six months until the new Minimum Energy Efficiency Standards are introduced in April 2018, I have considered the possible effects on landlords and the private rented sector and some of the suggested methods to improve property that will fall under the minimum requirements.

The 2015 Energy Efficiency Regulations set out new minimum energy efficiency standards for England and Wales. These regulations will make it unlawful for landlords to grant a new lease for properties that have an energy performance certificate (EPC) rating below E, from 1 April 2018, unless the property is registered as an exemption. According to research around one in five landlords (21%) will expect to spend between £1,000 and £4,000 on energy efficiency improvements in their properties over the next five years, but in reality improving the energy efficiency of a property to meet the new legislation does not need to incur such high costs. For landlords who are worried about the potential costs of upgrading properties, financial support may also be available through the Energy Company Obligation if tenants meet certain qualifying criteria.

Here we list some of the markets top tips to improve your EPC ratings:

1.       Don’t underestimate the importance of insulation in making a property more energy efficient. If the property was built before or around 1920, it most likely has solid walls. Solid wall insulation can be installed from either the inside or the outside. If the property was built after 1920 it’s likely to have cavity walls. These have a double external wall with a small gap between which can be filled with insulation.

2.       Don’t just think of improving energy efficiency as something for meeting regulations, it’s a commercial decision too. Given most tenants are responsible for paying energy bills, some may be willing to pay more for properties that are energy efficient, so make sure you’re making the most of this as a selling point.

3.       Without properly insulated windows, the property could be losing up to 10% of its heat. Double glazed windows make a big difference when it comes to lowering energy bills as well as reducing condensation and noise. Instead of double glazing you could install secondary glazing which involves fitting a pane of plastic or glass inside the existing window recess to create an insulating layer of air. Though not as effective as double glazing, secondary glazing still saves a significant amount of energy and allows you to maintain good appeal by keeping original features such as sash windows.

4.       EPC ratings look only at permanent improvements to the fabric of the building so think about long-term upgrades that will help to reduce heat and energy use. Simple things for example draught excluders will help keep heat in, but for the EPC you need to find permanent ways to fill the gaps to stop heat escaping through windows, doors, letterboxes and even keyholes. 

For those looking to bring their properties completely up to date, consider renewable technologies such as solar panels with an at-home battery to store electricity for use even when the sun goes down. Be aware these will contribute to your rating only if they’re helping to heat the house, rather than providing electricity for other uses. Whilst some of the above mentioned suggestions will reduce costs for landlords to a certain degree it should not discourage landlords from investing in long term solutions for their properties.

In the last few years energy efficiency for rented property has really started to take centre stage, with more and more tenants enquiring as to the properties energy performance prior to making commitment. It is now more important than ever that landlords embrace the changes that will be needed to ensure their properties meet the minimum standards necessary. In an already competitive market the changes you make to the properties EPC rating could be the difference between success or long term failure.