You may remember that until recently, landlords had a target to improveme the Energy Performance Certificate rating to at least a C by April 2025 for new tenancy agreements and by April 2028 for existing tenancies.
In March 2023, the deadline was extended when the government announced that all rental properties must haven EPC rating of C or better by 2028. It also announced the penalty for non-compliance would rise from £5,000 to £30,000.
In September 2023, the governmemt confirmed that all EPC requirements were scrapped mainly due to the expense of uprating older properties. That said, 30% of landlords were all ready and 50% had plans to make upgrades by the deadline.
In a recent survey by the Mortgage Advice Bureau of lenders, 50% of them want the EPC requirements to be reinstated and we have to agree.
So why the turnaround when many landlords had already gone to great expense to improve efficiency for their tenants ahead of the original deadline (including the directors of this firm) and were compliant? Our best guess is that politicians that are landlords have not upgraded their properties.
Perhaps legislation should be passed to cap rents as a % of the average local rent on properties with low EPC ratings or a lower tax rate for landlords with properties that are EPC C and above?
For mortgage lenders, we suggest that properties with EPC C and higher are more secure in both value and ability to rent out, so may be better deals or lower deposits for EPC C and above compared to properties with EPC D and below. After all, the property as security and future rent is more secure than those with a D or below EPC.
Our best guess is any future Labour government will also ‘croak’ on reinstatng EPC requirements given Keir Starmer ditched their planned £28 billion green policies this week.