The UK government's commitment to achieving the target of Net Zero by 2050 is clear, as it sets up a new department for Energy Security and Net Zero. According to estimates, the housing sector, including commercial and private properties, is a significant contributor to emissions. The greater energy efficiency of the housing sector will help reduce energy bills and boost the UK's efforts to meet energy performance targets. There is a need for better clarity on how the government proposes energy efficiency improvement across the private rental sector.

Need to support the stakeholders

The housing sector comprising landlords, businesses, homeowners, and other stakeholders is in the dark about EPC rule changes, despite the fast-approaching deadline to achieve an EPC rating of Band-C by 2025. Property owner’s in the UK have a lot at stake with the new EPC rules and expect clear guidance on making their properties EPC-compliant.

The Energy Security and Net Zero department must adopt an all-inclusive approach to work hand in hand with the stakeholders to draft a supportive strategy for long-term effectiveness. Most landlords are sceptical about the department's approach, as several owner-occupied and rented properties are yet to reach the EPC rating of Band-E.

Understanding the current and proposed energy regulations

Energy Performance Certificate (EPC) is mandatory for all rented properties in domestic and commercial sectors. The EPC rates properties from A to G. Properties for renting must have a minimum energy efficiency rating of E as per the existing regulations. The validity of the EPC is for a maximum of ten years. Property owner’s letting their property after this period must renew the Energy Performance Certificate.

Stricter energy efficiency rules are in the pipeline as the government attempts to move closer to achieving net-zero targets. From December 31st, 2025, all rental homes will require a minimum EPC rating of Band-C. The government will hike the fines for non-compliance from the existing £5,000 to a whopping £30,000.

The current scenario

With over 60% of private rental properties having an EPC rating of Band D or below, the landlords have an uphill task to achieve the mandatory rating of Band E. Failure to achieve the mandatory rating will prevent them from renting their property.

Landlords must prepare for stricter energy efficiency rules as the government is setting up a dedicated department or considering selling their properties or using these for storage.

Many tenants face the prospect of eviction if the landlord cannot afford the improvement to make the property compliant with the EPC regulations. These tenants cannot afford the rent on properties having a C rating.

The EPC regulations may be stricter from April 2023 as landlords will face legal consequences if they cannot improve the energy efficiency of rented properties as per Minimum Energy Efficiency Standards (MEES). Complying with energy efficiency standards is a slow and costly process. Time is running out for landlords who are yet to improve the EPC rating of their properties.

Checking the EPC of the property and assessing the need to make cost-effective improvements is the priority for landlords. Taking necessary steps to improve the EPC rating if it is below the Band-E is must. They should include the right to access the property for MEES compliance while granting new leases. Landlords may explore the possibility of recovering improvement costs through service charges.

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