- What an EPC is
- EPC available to prospective tenants
- How do I get an EPC?
- How much an energy performance certificate costs
- Penalties for not having an EPC
- How long is the EPC valid for?
- Where can I get a copy of the EPC certificate?
- What are the EPC exceptions?
- How much does energy efficiency improvements cost?
- Tips for finding suitable EPC assessors
There are various aspects to becoming a landlord that most investors are not aware of when they begin the journey and one question they will probably want to ask is, ‘How much does it cost to get an EPC?’
An EPC is an energy performance certificate and it’s an important part of a landlord’s obligations when it comes to the energy efficiency of their property.
It’s also important to appreciate that this is not just a required legal document, it’s also a measure of your property’s quality since having a good EPC rating will be hugely attractive to tenants.
Also, ALL rental homes that are advertised for rent must have an EPC in place and not having an energy performance certificate could lead to financial penalties.
What an EPC is
The first step is to explain what an EPC is. The energy performance certificate will show how energy efficient a landlord’s property is.
The ratings for the certificate range from Grade A, which is the most efficient property, to Grade G, which is the least efficient.
The idea behind an EPC is that the higher the energy efficiency rating is for a property means that the owners or tenants will have much lower running costs than those that are graded as being the least efficient.
Since 2008, EPC’s have been a legal requirement for landlords in England and Wales and for those in Scotland the EPC has been necessary since 2009.
However, since April 2018, all tenancies that were renewed or were new lets needed to have a property with a minimum energy performance rating of E.
And from April 2020, this regulation was extended to all existing tenancies.
Minimum requirement of E
If you have tenants in your property and it doesn’t meet the minimum requirement of E, then you are in breach of the law.
The energy performance certificate proves how much energy the landlord’s property uses and it’s this that shows tenants how much it will cost them to run for the hot water, lighting and heating. The certificate also shows what the property’s carbon dioxide emissions will probably be.
The process also offers landlords practical recommendations on how they can improve their rating.
The ideas range from installing double- or triple-glazed windows, insulating the walls or the roof and also introducing low-energy lighting.
The idea is to reduce energy bills and also help reduce the impact on the environment of a landlord’s property.
It is not unusual to find that homes that are new-build will probably have higher EPC ratings, and for older rental properties to have lower ones.
EPC available to prospective tenants
A landlord needs to make their EPC available to prospective tenants when they begin marketing their home for rent.
Indeed, it’s a sound idea when marketing the property to include its EPC rating – in Scotland, the certificate must also be clearly displayed in the property that is being rented out.
Essentially, the earlier that a landlord has an EPC in place then the better it is for them.
That’s because a potential tenant can then make an informed decision about signing up to renting a landlord’s property.
It’s also worth noting, that a copy of the EPC must be made available for free to anyone interested in renting the property.
But a landlord does not have to give someone the EPC if the tenant is unable to afford the rent or it’s unlikely the landlord will select them as a tenant.
How do I get an EPC?
A landlord will need a certified EPC assessor to carry out an energy survey on their property in order to obtain an energy performance certificate.
During the survey, the assessor will evaluate things such as the boiler, double glazing, the radiators as well as the loft insulation, so they can test the energy efficiency of the property.
This means the assessor will need to access to every room of the property so they can take photographs and measurements to determine what its energy rating should be.
This assessment is meant to be non-invasive and the time necessary will depend on the property’s size.
Also, once the assessment has been completed and you believe that the EPC is wrong, you can either contact the domestic energy assessor responsible for issuing the certificate or contact the accreditation scheme that licenses the assessor to have the EPC re-evaluated.
How much an energy performance certificate costs
Most landlords will need to know how much an energy performance certificate costs. Usually, an EPC will cost between £60 and £120, so it’s important that the landlord obtains several quotes before choosing an assessor to carry out the survey.
Penalties for not having an EPC
We mentioned earlier that there are financial penalties should a landlord not have an EPC for their property.
Failing to have an EPC can lead to a £200 fine for each dwelling and if the landlord then violates or breaches the rules that are set out by the property’s energy performance certificate, they could face fines of up to £5,000.
How long is the EPC valid for?
Obtaining the energy performance certificate is not a regular headache for a landlord since the EPC will be valid for 10 years after it has been issued. The certificate itself can be used lots of times during this period.
Also, a landlord can update their EPC rating so it reflects any improvements they have made to the property that will have help improve its energy efficiency.
However, a landlord will need to hire an approved domestic energy assessor to carry out another assessment to update their property’s energy performance certificate.
For those landlords with an EPC that has expired, then you’ll need a new one if you want to continue renting your property out because, as mentioned, you cannot rent to new tenants or renew a tenancy without one.
Where can I get a copy of the EPC certificate?
A landlord who wants to obtain a copy of their EPC certificate can do so because there is a register of these certificates.
It’s a government-run database and for those in England and Wales, you simply enter your postcode into the EPC Register.
In addition, landlords can also use the report reference number when looking for a copy of their EPC. The 24 digit number will be on the report or the energy assessor who put the original together will have it.
Landlords also need to appreciate that their energy performance certificate is accessible to the public. Essentially, anyone can use the property’s postcode, or the report reference number, to find the EPC that has been produced for their building.
When landlords receive a copy of their EPC, it’s a good idea for it to be displayed in their property so you could consider placing it in the meter cupboard near the boiler.
Also, a copy should be filed with the landlord’s administrative paperwork so they can find it quickly if necessary.
And for landlords in Scotland – it is the law to display your certificate prominently in the rental home.
What are the EPC exceptions?
There are a number of exemptions for properties in the UK where they do not need an energy performance certificate.
For example, listed buildings have since 2013 been exempted from EPC’s. Should the building have an EPC before this date, then the landlord needs the property to have a minimum of an E rating before they are able to rent it out.
It’s also possible for a landlord to apply to their local authority for an energy performance certificate exception, but they need to prove that the cost of improvements for them to reach the minimum energy rating standard would not be cost-effective.
While this rule has been in place since October 2016, not every landlord will know that this was changed in April 2018 when the government introduced a cap of £3,500 on the improvement costs to boost the energy efficiency of a building.
Failing to make the necessary changes means a landlord could face a fine of up to £5,000.
The landlord will need to spend the £3,500 maximum to carry out the work and then claim an exception stating that the work is too expensive to meet the legal requirements.
This means the landlord will need to tell their local authority and it’s likely they will check that the claim being made is correct.
This rule affects those landlords with a property that is rated F or G for their EPC.
Again, there are exemptions for those landlords who may not need to pay for improvements.
How much does energy efficiency improvements cost?
Having mentioned that since the government introduced their £3,500 spending cap, most landlords are unlikely to face this level of improvement cost.
According to various surveys, the average price that a landlord will pay is £1,200 to upgrade an older property to meet the Grade E needed for a rental home’s EPC.
It’s also worth bearing in mind, that the average EPC rating for a home in the UK is D – so the government is not asking landlords to make their rental homes more energy efficient than the average home will be.
Other tips for improving a landlord’s energy performance certificate rating for a property include installing solar panels because this is an environmentally-friendly way to produce energy and you may need to consider ground source heat pumps or even biomass boilers.
Tips for finding suitable EPC assessors
While the cost of an EPC assessment will vary – and it’s certainly worth shopping around – it’s important that landlords choose an assessor that is registered.
It’s also important that landlords do not market their rental home to prospective tenants without having an EPC in place beforehand so it’s worth appreciating that when using an assessor, there may be some delay in having an EPC being delivered.
This means that you run the risk that a tenant may leave the property before the EPC process is complete so there’s no rent coming in and you’ll need to deal with a void period.
And even if a third party assessor says they are registered, it is still worth doublechecking to ensure this is correct to avoid any potential issues.
For those landlords who are using a letting agent, then they can organise this on your behalf though it’s unlikely the cost will be at the lower end of the range.
However, since an agent will be using the same firm regularly, they will be incentivised to process your EPC application as soon as possible.
This also means that the assessor will be experienced in assessing rental properties and it’s unlikely that a landlord will enter a dispute process over any delay or the final rating.
Finally, landlords cannot ignore a tenant who requests that energy efficient renovations be carried out to the property to boost the overall EPC rating. The tenant can lodge a complaint and a court can compel a landlord to carry out the work promptly.
There’s a lot to consider when undertaking an EPC for a rental home but the cost is fairly inexpensive and the overall effect is to help boost the property’s attractiveness to a potential tenant.