What a simple idea: a piece of paper with colored bars telling you how energy efficient your home is and suggesting improvements.
In fact, the government is so confident in energy performance certificates (EPCs) that it has proposed in its latest Net Zero strategy that from 2028 landlords will no longer be allowed to rent out properties unless they achieve at least a C rating (there is an exemption if you can demonstrate that it would cost more than £10,000 to bring a property up to C standard).
Landlords have been threatened with £30,000 fines if they flout the rules. It is already illegal to rent out a property in the lowest two bands – F and G.
We all want a warm house and do what we can to reduce CO2 emissions. So why are internet forums buzzing with so many landlords protesting the government’s plans?
New rules: government is so confident in energy performance certificates that it has proposed that landlords should not rent unless they achieve a C label
There’s Gary from Dorset who complains that his flat built in the 1980s only got a D when other identical flats on the same block were rated C.
Then there’s Phil, who was told in his EPC to install cavity wall insulation to raise his property from a D to a C.
But when he asked for a quote, he was told by an insulation company that it wasn’t possible – his house was too far from the road to stretch the hose to pump the foam in.
There are also stories of property owners who spent a fortune on energy improvements only to find that their energy rating had dropped.
David Simms, a Clapham landlord, spent £10,000 on one home, installing insulation and replacing the gas boiler with electric heating – certainly something the government should please as it aims to achieve net zero by 2050 achieve carbon emissions.
> Energy assessors speak out against ‘unrealistic’ government eco-requirements for landlords
But the result? His property went from a B to a D, which means that it can no longer be rented out from 2028.
“Energy performance certificates are basically good,” said Ben Beadle, CEO of the National Residential Landlords’ Association (NRLA).
‘But at the moment they don’t give a good picture. In total, 65 percent of rental properties are class D or lower, and a quarter of owners say they will leave the market.
It’s one thing to spend £10,000 to bring a property up to standard if it’s located in central London, where property values are high. But if you own a home in the North East that’s worth £60,000, you’ll seriously question whether it’s worth it.
“The government keeps saying that the private rented sector is an important part of the housing sector, but that is difficult to reconcile with the changes it has made in legislation.”
There is already a shortage of rental properties, he added, and that will become even more acute if landlords are forced to sell such properties.
‘It’s one thing to spend £10,000 to bring a property up to standard if it’s in central London where property values are high.
‘But when you own a terraced house in the North East that’s only worth £60,000 you seriously start to wonder if it’s worth it. That is why we have proposed a lower threshold of £5,000 for parts of the country where property prices are low.”
In other words, landlords are expected to spend as little as £5,000 to bring a house up to Level C.
If the necessary work seemed to cost more, a landlord could apply for an exemption certificate and still rent out the property.
I sympathize with the landlords. In the early days of EPCs, I had done two in my home, one year apart.
The first gave me an E. The second gave me an F – despite the fact that I had reinforced the attic insulation in the intervening period.
Can EPC ratings be trusted?
Few in the real estate industry seem to have confidence in EPCs. Three years ago, the government held a consultation on them. Of the 145 respondents, only five believed that the reliability of EPCs was good.
The Department for Leveling Up, Housing and Communities says it is still working on ways to improve the reliability of EPCs, but it won’t reveal how. It says it will discuss changes but gives no date.
Among those skeptical about the accuracy of EPCs is UK Finance, which represents mortgage lenders – who as a group are under pressure to improve the average EPC rating of the properties in their loan portfolios.
EPCs, the body says, are “not fit for purpose” in their current form, not least because they “don’t account for emerging heat technologies.”
An EPC is supposed to be a measure of how much it costs to heat and light a home, rather than its CO2 emissions, and the reason homes with electric heat pumps are collapsing is because the methodology assumed that gas a cheaper way to heat a home. home than electricity.
The problem is that an EPC doesn’t really measure how much energy your home uses.
Instead, an energy assessor takes some measurements and feeds them into a computer model that estimates energy use. What the evaluator gets out depends on what is put in – and that can be little more than guesswork.
Two years ago I looked at some flats in a converted Victorian convent. One was rated B, the other D.
The difference? The EPC of the former read ‘solid walls, insulated (assumed)’, and the latter stated ‘solid walls, uninsulated (assumed)’.
The benefits of an energy-efficient home have never been more evident than last winter, with skyrocketing energy prices.
But if EPCs can’t tell you how much you’re going to spend to keep your home warm, they’re worse than useless.
A better way, says Ben Beadle, would be to provide each home with a log showing how much previous owners spent keeping them warm.
That might not make a difference to people like me, who wear a thermal vest and set the thermostat to 17c, but it’s better than guesswork.