A recent study on the reliability of Energy Performance Certificates (EPCs) has shown that more than 30,000 properties in the UK could be let illegally. The study by property technology firm Spec has suggested that landlords could unknowingly be letting out properties because of the use of inaccurate measuring standards and practices are being used to determine the energy efficiency of a property.
Specifically, the report claims that there are inaccuracies in the reporting of floor space, with errors as high as 10%. More than 2.5 million properties could be affected, and because it is illegal to let a property with an energy performance below E, this means that around 33,000 properties that are being reported with an energy level of E or higher might in fact fall below the threshold.
Energy Performance Certificates (EPCs)
Energy Performance Certificates are a European Union (EU) initiative. They were introduced in a bid to try and improve the energy performance of properties. EPCs are displayed in a similar way to those that are found on consumer appliances like washing machines and boilers.
As well as a numerical rating between 0 and 100, the certificate also includes a letter rating between A and G, where A is the most energy efficient and G is the least efficient. The certificate not only shows the level of energy efficiency, but its rating is designed to make it easier to compare properties quickly and easily.
An EPC is valid for 10 years, and one must be provided whenever marketing a property. Landlords cannot charge tenants for a certificate and doing so can lead to a £400 fine. New tenants should be provided with a copy of their energy certificate when they move in, although most will want to see the certificate when considering renting a property.
Minimum Energy Efficiency Standards (MEES)
In 2016, the government introduced new laws regarding the energy performance of properties. Under the new guidelines, properties rented out in the private rental sector, must have Minimum Energy Efficiency Standards (MEES) of an E. New tenancies and renewals must meet these guidelines from 1st April 2018, and all existing tenancies fall under these guidelines from 1st April 2020. A penalty of up to £4,000 can be levied on landlords that fail to meet these standards.
Under the government’s Clean Growth Strategy, the government’s aim is for all let properties to have an energy rating of C or higher by 2030. However, experts have warned that it would be cost prohibitive for most property landlords to achieve these kinds of rating without major work needed.
What Governs Energy Rating
Energy performance is determined by the among of energy that is used per square metre, as well as the environmental impact of the property. The certificate should also give an estimate of how much it will cost to light and heat the property, as well as an estimated cost of providing hot water to the property.
An engineer will check the property and will analyse all visible aspects of the property. They will not rip out walls to check insulation, but if the insulation is visible, they will take this into account, for example. The certificate includes details of things like wall construction, roof construction, and floor construction type; windows and glazing; heating system and heating controls; and low energy lighting. As well as providing details of the current systems and constructions, the certificate will also give information on potential improvements, including both low cost and high cost improvements, along with the likely impact of those changes.
How Landlords Can Ensure Standards Are Met
Landlords must now ensure that properties meet a grade E or higher, otherwise they cannot let the property to a new tenant and cannot offer a new tenancy agreement to existing standards. By April 2020, all let properties, including those with an existing tenant, must meet the same standard, so landlords should start preparing now.
If you have had an energy performance certificate completed recently, you can use this to govern the changes you make. The single biggest improvement that can be made to most properties is the installation of a modern condensing boiler. These are extremely energy efficient, and this could be enough to boost a rating from an unacceptable to an acceptable level. This is also one of the most cost-effective changes you can make, especially when compared to major structural changes like upgrading flooring or walls.
Property technology company, Spec, has compiled a report suggesting that around a quarter of all EPCs use measurements that are out by as much as 10%. The report suggests that property sizes are inaccurately measured and reported, having a significant impact on the eventual energy rating.
It goes on to say that measurement techniques employed by Domestic Energy Assessors have led to an average discrepancy of 8.6%, which is equivalent to 87 square foot. This would affect a total of 2.5 million properties and means that 33,000 properties currently being marketed with an EPC rating of E or higher may actually have a rating of F or G, and landlords could unknowingly be letting illegal properties to tenants.
How Haboth Can Help
Haboth Lettings offers property management and letting management to landlords in Blackpool and the Fylde. We can take over all aspects of managing your rental property, including arranging energy certificates and ensuring that they are accurate. We can market your properties and conduct all relevant gas and safety checks to ensure that you meet all current and planned tenancy requirements, while reaping optimal rental yield for your properties.
Call us on 0333 012 4895 today and see how we can help manage your portfolio and find new tenants for your property.