Hello readers,
Landlords have had some good news as the year kicks off in terms of EPC legislation!
I have purposely stayed away from this topic since last January because the proposed change is quite significant and there is so much confusion about what’s actually law and what isn’t.
However, there have been some changes to proposed legislation that I feel could be very positive so wanted to share them with you.
Before we look at these changes, please note that anything you read about EPC legislation is just about the proposals – nothing is law yet and my recommendation is that landlords prepare, but do not act until all has been confirmed. You can read more about these in the warm homes plan that’s just been released here.
Implementation dates
Up to the end of last year, proposals read that the proposed date for all privately rented properties to meet an EPC grade C (if they can) was 2028 for existing tenancies and 2030 for new tenancies.
It is now proposed that all privately rented properties be an EPC grade C by 1st October 2030, removing the phased in date of 2028.
Given the lack of trades to upgrade around half of the UK’s rental stock in just two years if legislation was passed today, this is a sensible move!
Cap on improvement costs
Previous proposals had a cap of £15,000 on improvement costs and this proposed cap has now been reduced to £10,000.
Still a significant amount of money, but it will generally mean that internal or external wall insulation (the main blocker for Medway properties) will not need to be carried out. If it were, I think Medway would loose a significant amount of rental stock!
If required improvements are over this cap, a five year exemption can be sought.
Note a change to how EPCs are calculated
Currently, EPCs are a stepped scale of requirements from things like energy efficient lighting and then insulation, followed by a heat pump, solar energy etc.
There is a brand new EPC calculation proposed, but is subject to consultation still. Let’s hope that the government doesn’t bring in the requirement for an EPC C whilst the new way of calculating the grade is not confirmed – I’d not put it past them to do this!
This new proposed replacement system, known as the Home Energy Model (HEM) EPC, would introduce a two-stage process.
Stage one: Fabric Performance
The property must achieve a minimum standard for its thermal efficiency. This focuses on how well the building retains heat, assessing elements such as insulation, glazing, and overall heat loss. Unlike the current EPC, the heating system itself is not considered at this stage.
Stage two: Heating or Smart technology compliance
The second stage represents a more significant change. Landlords must either install a low-carbon heating system or incorporate smart energy technology.
- The heating metric effectively favours heat pumps, with even high-efficiency gas boilers unlikely to meet the required threshold
- Alternatively, the smart readiness route requires on-site energy generation, such as solar photovoltaic panels
In practical terms, once EPC C certificates issued before 1 October 2029 expire, landlords may need to do more than simply improve insulation.
Compliance is likely to require investment in either a heat pump or solar panels, whilst also ensuring the property’s fabric meets the required standard (with some limited exemptions, such as for certain wall insulation works).
Let’s see if realistic financial support will be made available to help offset some of these costs.
So, whilst this is positive news, uncertainty still remains and landlords need to be prepared for the potential changes. Reserves should always be in place, but I would recommend that landlords have a plan to finance this
Do I think this will happen by 2030? I doubt it – possibly 2035 and possibly it will be thrown out in 2029 if there is a change in government after the next general election.
What do you think about this change to the proposals? I’d be interested to hear – the best way to contact me is by emailing hasan@home-share.co.uk.
Hasan