If you are a landlord like me, then the EPC upgrades needed to raise rental properties that are band D, E or F to the minimum C – the level that will be required by 2030 under the Government’s current proposed reforms – are vexing.
The issue was highlighted again this month not by alarming stats from the Ministry of Energy Efficiency and Net Zero (MEENZ) or its Secretary of State Ed Miliband but rather his colleague Rachel Reeves, the beleaguered Chancellor.
It emerged over the weekend that the EPC for her four-bedroom family home in Dulwich, South London, which she has been renting out (without a licence until recently, it was also found last month) has an EPC with a Band D. This is, of course, entirely legal as the only mandatory part of the EPC system at the moment is that a landlord’s property has an EPC, not what band it is.
What the story highlights is that hundreds of thousands of accidental landlords (like Reeves) and professional property investors face significant bills to upgrade their properties by 2030. The Government has capped this at £15,000 and the EPC for Reeves’ rental property shows she will need to spend £7,500 to get her to a band C.
But my problem with all this is that landlords and property investors will not get long to do the remedial work. The Government has been consulting on its proposals for much of this year and civil servants, if previous form is anything to go by, will take months to come up with the final draft of any proposals. Also, any changes to legislation, or any new laws/regulations will take many months to organise.
Remember that reform of the EPC system is not just about minimum standards and a date for implementation – Ministers want to overhaul the way EPCs are measured and what they report, as well as what information EPCs will contain. There’s plenty to do. This means the private rented sector and its landlords, assuming the 2030 implementation date is not changed, will have approximately three years to upgrade millions of homes, work which official estimates has revealed will cost between £18 billion and £20 billion.
While some properties, like mine, will just need a new boiler to get their homes to a band C, a significant proportion will require one of many changes requiring the tenants to move out, rent to be lost, interior or exterior walls insulated, lofts and/or roofs lagged, heat pumps installed and energy-efficient lighting fitted.
Some of these are expensive – for example my flat’s EPC says internal wall insulation, which would be very disruptive for the tenants and messy, and cost up to £14,000, would save just £295 a year in heating costs. Luckily it wasn’t needed. The only good news here is that EPCs last ten years. The one for my London flat was completed two years ago by leading EPC consultant James Tanner so whatever the Government’s reforms bring in, I won’t have to worry until 2033.
Nevertheless, I would urge landlords with properties that have an EPC below a band C to consider getting their properties upgraded before the system is changed. And remember there is also likely to be a huge rush in 2029; many landlords will wake up to reality of having a badly-insulated rental property but discover there are long waiting lists as experts and builders struggle to deal with spiking demand for their services.
I suspect therefore that landlords and property investors will be give more time to complete the works by the Government, but I’m not sure I’d want to be taking that gamble.
