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Legal Warning — some buy to lets will never meet new EPC targets

One of the industry’s leading legal voices is warning that the next change proposed to EPC requirements will affect almost half of the UK’s entire buy to let sector.

Since April last year landlords can no longer let a property with an EPC rating of F and G, unless they have a valid exemption in place. 

The government propose to raise this to minimum rating of C by 2028 for all private tenancies and all home by 2035 - and it is this latest proposal that is the subject of controversy. 

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David Smith, real estate partner at JMW Solicitors and a prominent legal representative fighting the corner for landlords, says: “Only good quality new-build properties or those which have had significant upgrades are likely to reach EPC band C. 

“This will be a big change. Moving to band E only affected around 200,000 of the least efficient properties based on government figures. Moving to a band C will affect well over two million properties, approaching half the buy to let sector depending on whose figures you prefer.”

He continues:  “The approach taken by the Department for Business, Energy & Industrial Strategy in their proposal is difficult to understand as it fails to take into consideration the reality of properties in the UK. 

 

 

“There are some new build properties which do not meet the new requirement of a band C EPC and older properties which will never be able to meet it, regardless of the owners’ best efforts and intentions.

“There is also the question of how to manage the removal of properties from the sector. The BEIS proposals do not recognise that energy inefficiency is unequally distributed. 

“For example, rural areas often have older properties with lower levels of energy efficiency which are also harder to upgrade. There is a risk that there will be drastic losses of private rented property in specific parts of the country with nothing available to replace it.”

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

  • George Dawes

    Leading to the inevitable destruction of the prs - all planned

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    Leading to homelessness none of my tenants in rural Devon would be able to buy especially when mortgage companies will soon stipulate that only properties banded C and above will be eligible for finance
    My properties will be sold to cash rich incommers as holiday homes adding to the existing housing crisis

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    Has the Govt deleted D from the alphabet without anyone noticing? Why this jump from E to C? It is too large a jump - some will be scared of such a large jump & not even try; and many who try will fail and leave the game; a few will make the leap & be safe until we have to jump again to B. We need the stepping stone of D to allow us to bring everyone with us on the journey to save the planet (and house all the tenants!)

    I'm off looking for D - anyone want t come & help me look?

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    I’m looking for D too. I am of the opinion that they said C to get peoples attention. IT WORKED. Shortly they will do a U turn and say D and we will think we have won. Personally if they don’t I will have to sell my rental properties as I can’t afford to upgrade them to a C. So that’s three properties off the rental market.

     
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    The requirement of absolute proof needs to be changed.
    On the original EPCs around 13 years ago assessors tended to go with likely assumptions especially for roof insulation. Now because they are terrified of being audited they insist on unreasonable levels of proof. For example two of my houses have flat roofs. The original EPCs assumed they had some insulation. The most recent EPCs assume no insulation. One of them was replaced by the Council sometime in the 1980s so we have no idea how much insulation was put in then. We had the felt replaced in 2004 with EPDM and 25mm of Celotex was added on top of the old roof then. No idea why it was only 25mm but it was what the roofer recommended. I have vague memories of him taking up a small piece of the roof deck and checking what was under it but nothing was put in writing.
    The other one has 120mm of Celotex on it. I have photos of it being installed and a Building Control certificate saying it conforms to the required standards in 2014. Because BC didn't mention the thickness of Celotex, the invoice doesn't mention the thickness and the roofer wasn't holding a tape measure when he took the photos the EPC assumes the roof is uninsulated.
    Same problem with underfloor insulation and internal wall insulation. It often exists but we don't have written or photographic evidence of exactly how much or which products were used.

    Now EPC scores are so crucial should we be looking at suing assessors when they make incorrect assumptions? Previously it was just annoying, now their errors could cost us a fortune.

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    Very good point Jo. We will need to be very vigilant about making sure we get comprehensive documentation for all improvements done.

     
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    Has no one in the Government considered the situation where for example cavity wall insulation has caused substantial issues in a property and either needs to be removed or cannot be installed due to the location of a property?

    Also there is the issue of evidence required for genuine EPC assessments. For example Building Control until the latter end of the naughties didn’t issue Completion Certificates proving BRegs compliance. In addition the description on such certificates can be ambiguous and not meet the requirements of the EPC auditors this all resulting in properties being down graded.

    I have a property which is a clear C and yet when the Assesor was audited it was downgraded to an E. yet the EPC rules allow for an assessor to qualify a property as efficient in low energy lighting with only one such bulb evident. Crazy!

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    I changed all the standard bulbs to LED for my EPC. Unfortunately the assessor found 1 in the loft I had missed. So I got down graded.

     
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    We need to do something to make homes easier to heat. If it’s too costly, exemptions are available:

    From the Government website:

    “The cost cap: you will never be required to spend more than £3,500 (including VAT) on energy efficiency improvements.”

    I bet here in Scotland Nicola goes one better and sets the cost ceiling at £5k or something...

    As an ex energy assessor, I agree that getting proof of insulation can be tricky, I used to ask clients to send in proof before I completed the assessment back at the office or sometimes to remove a socket whilst I was there, so I could see insulation. And yes, the audits were a pita. Some geezer from Milton Keynes or somewhere asking me to send in photos of the underfloor glass wool that I’d noted, when it wasn’t a requirement to have photo proof (at the time) and telling me how houses are built in north east Scotland!

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    It might be increased to £10,000...

    If you google "The cost cap: epc being increased"

    Its the first landlord today article

     
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    Oh, and I’m surprised nobody is complaining about the obvious injustice. Why are private lets singled out? If we are serious about the environmental impact of heating systems, the all homes should have the same epc requirements.

    Nobody loves a landlord!

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    Too many votes to be lost if they targeted all properties.

     
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    I have a newly completed flat complying with the latest Building Regs for which the Epc has been downgraded because the heating and hot water is electric. If I was able to put in Gas heating I would get a much better rating but it is not available in that location and as a flat a heat pump is impractical. Gas is also something the govt is trying to phase out and yet landlords may be forced to fit it in order to bring their proprety to a lettable standard!
    The most stupid part is that there is a 2.5kw solar panel array on the roof generating the electricity which is not even taken into consideration!
    The whole EPC grading system is a farce and needs bringing into the 21st century to reflect both the advancements made since EPC's were first introduced and the governments policy re improvements to upgrade and meet their targets.

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