The government has gone out to formal consultation about stricter Energy Performance Certificates – and perhaps predictably, that means bad news for landlords. 

An EPC is currently valid for 10 years and need only be renewed after that time, unless a rental property changes tenant . However, the government suggests that shorter durations could capture improvements (or degradations) in energy efficiency between times. 

The consultation says: “There may be an information benefit for prospective Private Rental Sector tenants and policymakers for more current EPCs, and landlords may be able to capture upgrades to their properties more easily, in turn potentially improving desirability in the market and aiding compliance with regulations such as Minimum Energy Efficiency Standards.”

Then it adds: “However, landlords may also incur a very small increase in costs from more regular EPCs.”

The government proposes that a new EPC is required at the end of a tenancy duration even when the same tenant renews or extends their lease. 

Current regulations require an EPC to be commissioned prior to a building being marketed for sale or rent but allow a maximum of 28 days following the marketing for the certificate to be produced – this is to stop the absence of an EPC hindering a sale or letting.

However, the government now says there should be an amendment to the regulations to state that a building should not be marketed for sale or let without an EPC. The government says: “This will ensure that buyers and renters have information available to them at the point of making a purchasing decision whilst making the requirements clearer and easier to enforce.”

The government is also proposing to extend the scope of EPCs so that a valid one is required for an entire HMO when a single room within it is rented out – currently the guidance states that an EPC is not required in this instance, only when the whole house is rented out.

The consultation proposes: “Mandating EPCs for HMOs when a single room is rented out will ensure that HMOs will need to comply with the requirements set out in the MEES Regulations if they did not have a valid EPC before this point. This would provide consistency across the private rented sector. As a result, we are proposing a 24-month transitional period for any HMO landlords newly brought into the scope of the regulations to obtain a valid EPC. This would also ensure reasonable time to comply with MEES requirements if these were applicable.”

And it goes on: “As HMOs are disproportionately occupied by vulnerable people, we anticipate that these measures will help ensure that tenants are living in thermally comfortable properties, with reduced costs during a time of high fuel poverty.”

And on short lets, the consultation says: “The current guidance states that an EPC is only required for properties rented out as a furnished holiday let, as defined by HMRC, where the building is occupied for the purposes of a holiday as a result of a short term letting arrangement of less than 31 days to each tenant, and is rented out for a combined total of four months or more in any 12 month period, and if the occupier is responsible for meeting the energy costs for the property.

“We are proposing updating the regulations to provide a specific requirement for short-term rental properties to have a valid EPC at the point of being let.”

You can see the full consultation here: https://www.gov.uk/government/consultations/reforms-to-the-energy-performance-of-buildings-regime/reforms-to-the-energy-performance-of-buildings-regime