EPC changes for landlords scrapped

Proposed EPC changes scrapped

The government announced it would ‘scrap policies to force landlords to upgrade the energy efficiency of their properties’ in September 2023. And instead they will be encouraged to ‘do so where they can’.

Under the proposals, the minimum EPC rating for rental properties would have increased to a rating of C for new tenancies from 2025 and for all rental properties by 2028, where practical, cost-effective and affordable.

It had also proposed that the penalty for not having a valid EPC would be increased from up to £5,000 to up to £30,000 from 2025.

What are the current EPC rules?

Under the current rules, to let out a rental property it must have an EPC rating of at least E. This applies to all existing tenancies, not just new ones or renewals.

If your property doesn’t have a valid EPC or Energy Performance Certificate rating of ‘E’ or above, it cannot be legally let, unless you have a valid exemption in place.

However, there is a cost cap in place: landlords will never be required to spend more than £3,500 on energy efficiency improvements.

Landlords vs tenants: Who wins from proposed EPC changes being scrapped?

News that the EPC changes for landlords have been scrapped have been welcomed by landlords. However, research from Shawbrook reveals that 80% of UK landlords had already prepared for the 2025 EPC regulation deadline.

But by scrapping these proposals which would have led to improvements in the least energy efficient rental properties, it will be tenants who will be left footing the bill in higher energy bills or living in colder homes.

Is it still worth improving EPC ratings?

Despite the proposed EPC changes being scrapped there are a number of reasons why you may still want to improve your Buy to Let property’s EPC rating.

• The property would be more appealing to potential tenants.
• You may be eligible for a green mortgage if your EPC rating is high enough.
• While these changes have been scrapped, they may be back on the table if there is a change in government.

How to improve your property’s EPC rating

If you want to improve your property’s EPC rating, here’s how to do it:

1. Check your EPC ratings: If you don’t know the EPC rating of your rental properties then check them. You can search for your property on the government’s EPC register. And when you check your certificate, as well as seeing the band your property is rated as you’ll see a number too, this is known as your ‘SAP score’. This number indicates whereabouts within the band your property currently sits. So if you’re already very close to the next band up it could be that by just making some simple changes like installing energy efficient lighting you may be able to move up into that band. Read our guide on the top projects to make your home more energy efficient.
2. Find out about support: Look into whether it’s worth taking advantage of the government’s Boiler Upgrade Scheme. In September 2023, the government announced the Boiler Upgrade Grant will be increased by 50% to £7,500 to help homeowners who want to replace their gas boilers with a  more efficient heat pump.
3. Think about funding now: And if you’re planning major works and you’re planning to remortgage, then you may consider releasing equity to pay for the improvements. If you’re planning to improve your property’s energy efficiency it may be that a green mortgage is a good option. But as always with mortgages you’ll want to make a fully informed decision. So to find out what’s the right option for you get fee-free advice from our partners at award-winning mortgage brokers L&C

Is making EPC improvements tax deductible? 

Property improvements intended to boost the EPC rating are classed as ‘capital expenditure’ and not repairs and maintenance. This means they can’t be written off against profits to reduce your tax bill. 

Do I need my tenant’s permission before arranging an EPC assessment?

If you’re a landlord you must have at least 24 hours’ written notice of any property visits. As an EPC is a legal requirement, most tenants will happily oblige, but some may want to be present when the assessor visits.

I’m a tenant – can I see the EPC?

Yes. As a tenant you are entitled to see the property’s EPC and you must be given a copy when you move in. However, you can check the property’s EPC yourself by checking the government’s EPC register in England and Wales. For properties in Scotland check the Scottish EPC register and similarly the Northern Ireland EPC register.

How long does an EPC last?

Once completed the EPC is valid for 10 years. However, when it expired you only need to get a new one if you’re setting up a new tenancy agreement or selling your property.

What are the EPC requirements for Scotland and Wales?

Rental properties in Scotland and Wales require an energy rating of ‘E’ or above to be let.

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Angela Kerr Director, Editor

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