Negotiation, Negotiation, Negotiation

UK Property Investment news and comments from Mark Harrison of YourPropertyExpert.com

Energy Performance Certificates for Landlords

Posted by markharrison on April 30, 2008

Energy Performance Certificates (EPCs) are a key part of the Home Information Packs I wrote about in November.

As of 1st October this year (2008), EPCs will additionally be required by landlords starting new tenancies.

Now, with all these things, it’s always possible that the legislation (or, rather the “guidance”) will change before  October, but as things stand here are the rules.

  • If you have a tenant in place, you do NOT require an EPC.
  • If you put in a new tenant, you must have an EPC at the time you market the property to potential tenants.
  • When any tenant moves in, they must be given a copy (a photocopy is fine) of the EPC. (This means in, say, an HMO, each tenant will need a copy.)
  • An EPC is valid for 10 years. If the property is extended / modified during that time, you will not be required to get a new one (though you may choose to, particularly if the modifications improve energy efficiency.)
  • If a property contains “self-contained units” then each one of these units requires a separate EPC, as well as there needing to be one for the property overall. That is to say that letting a house to, say, three students who each (at least from a contractual point of view) have free run of the house requires one EPC… but letting the same house as a shared living space plus individually contained bedrooms (with room locks) would require four EPCs – one for the house, and one for each self-contained room.

It is likely that there will be a backlog of EPCs come the first October, so landlords may well be better getting them booked now. (I had one about 2 weeks ago – it lasted about half an hour, and is relatively painless!)

However, before you do so, there are some things that may be worth considering doing. The big question is whether prospective tenants will actually pay any attention to the ratings – I suspect that, like with the EPCs in HIPs, the current answer is “no”… but equally, over the next ten years, that may change, as people become more conscious of energy issues.

In these days of rising energy prices, it’s hard to calculate the payback period, but as energy prices rise, the payback period will get shorter. HOWEVER, for a landlord, there’s the obvious problem that the landlord pays for the insulation, but the tenant reaps the reward of the lower heating bills… which is, of course, why the government (actually the EU) are trying to promote EPCs as a way of making tenants aware of the potential saving

(If, as some are speculating, carbon trading gets extended to individuals as well as companies, this may really take off.)

The cost-effective things that can be done quickly to improve your EPC rating are:

  • Replacing light-bulbs with energy efficient ones. (The bulbs in place on the day of the assessment are the ones that count… some unscrupulous people are reported to have a collection of bulbs they take from place to place fitting just before the assessor arrives, then replacing with cheap bulbs the moment they’ve gone…. though as the price of low-energy bulbs is falling, this is less common.)
  • If the hot water cylinder doesn’t have a jacket, add one – such things cost about £12 from B&Q

The more expensive things that may be worth considering are:

  • Loft insulation (if you are prepared to fit it yourself, then estimates for an average house are £3-500.
  • Cavity wall insulation, which is not a DIY job, and is not without its own problems.
  • If you are replacing a boiler (or have a boiler that is more than 5-6 years old), then realistically it will have to be replaced with a condensing boiler

2 Responses to “Energy Performance Certificates for Landlords”

  1. […] it’s not really clear who (apart from HIP providers) is benefitting. Certainly, given the rollout of Energy Performance Certificates to Landlords due on the 1st October, this government doesn’t feel like a government wanting to reduce the […]

  2. Thx for this loan article.

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