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Changes to Energy Performance Certificates

How energy efficient is your home? It’s a question you’re going to want to consider if you’re about to let your property. And it may soon be an issue when seeking a mortgage, as consumer journalist Christine Toner explains.

energy efficient

Energy efficient

Energy efficiency is hugely important for homeowners. Who wants to live in a home – or indeed buy one – that drains your bank account anytime you turn the heating on? But for those people looking to let out their property, the energy efficiency of a property is even more important, particularly as a result of new rules coming into effect next year.

Letting your home

In recent years, the term “accidental landlord” has become commonplace. It refers to those homeowners who didn’t intend to get into buy to let but have found themselves looking to let their property because they’re struggling to sell it.

Becoming a landlord means adhering to a whole load of safety regulations, including providing a gas safety check record before then tenants move in and ensuring a registered engineer carries an annual gas safety check on each appliance and flue. What’s more, you’ll need to make sure your property is energy efficient.

In new regulation, announced in 2015 and set to come into play in April 2018, any residential property let to tenants must have an EPC rating of A-E. If your home scores an F or G you’re not legally allowed to let it.

How do EPCs work?

EPCs were brought to the market in 2007 as part of the now defunct Home Information Packs (HIPs). They are provided to a buyer or tenant of a property and give information on how energy efficient a property is and how much it would cost to run. The EPC gives the property a rating, which is set by an assessor who will visit the property and look at things like loft insulation and double glazing.

Is the new rule a smart move?

Most definitely. Landlords letting to tenants have an obligation to make sure that the property is fit to live in and that means not being a money pit when it comes to energy. According to Citizens Advice, over 750,000 private tenants in the UK are forced to pay £1000 more than the national average on their energy bills because the property they rent are so poorly insulated. Clearly this must be stopped.

What if I’m not letting my property?

Legally, you’re free to live in a property that’s as energy inefficient as you like but why on earth would you want to? By improving the energy efficiency of your home, you could save hundreds on your heating and water bills and, if you come to sell the property, it will be much more attractive to potential buyers.

Indeed, mortgage lenders are always interested in the value and saleability of a property and if a home has a poor energy efficiency rating we may see lenders taking a negative view of such properties.

According to the English Housing Survey, 5% of homes in the UK have a rating of F or G – not an insignificant amount!

David Hollingworth, associate director at our mortgage partners London & Country says: “Anything that can affect the marketability of a property could impact the valuation and therefore surveyors recommendation to the mortgage lender.  A very low EPC rating could figure in that in their determination of the property’s suitability as security”.

Read our top ten energy saving tips to find out how to cut your energy costs and make your home a whole lot greener.

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