Everything we know about EPCs in buy-to-lets: summer 2024 edition

It was back in October 2008 that EPC certificates became a compulsory requirement for privately rented properties and since then, their standing among landlords and tenants has grown.  

In 2024, there is evidence that EPCs are becoming a critical factor in the UK’s private rental sector. Here is everything we know about EPCs in buy-to-lets this summer:-  

The standard landlords need to achieve is set to edge higher

Primary indications show changes to the benchmark EPC in the private rental sector are almost guaranteed. While the outgoing Conservative Prime Minister backed down on his party’s wish for private rentals in England and Wales to transition to an EPC of at least a C from the end of 2025, the new Labour party has indicated it will reinstate this reform.  

In 2023, Sir Keir Starmer announced that if Labour came into power, it would pursue its Warm Homes Plan. This is designed to slash energy bills and help drive England and Wales towards net zero carbon status. It’s thought the reintroduction of a new, minimum EPC standard in private rentals will help achieve these aims.   

We expect revised EPC details to appear in the new Renters’ Rights Bill when published later this year but it’s touted that landlords will need to achieve at least a C grade for new and tenanted rentals by the end of 2028.  

The above requirement mimics what is being proposed in Scotland. Its Heat in Buildings Bill wants all new tenancies north of the border to have a C-rated EPC by the end of 2028. Long term proposals may also force private landlords to replace gas and oil boilers with clean heating systems before 2045.   

Landlords will have to take action when energy changes are recommended

If a minimum C EPC rating is part of Labour’s plan for buy-to-lets, landlords will no longer be able to ignore the recommendations suggested by energy assessors when getting a new EPC.  

This July, the latest English Housing Survey 2022 to 2023: energy report uncovered a worry trend among property investors. Of those renters questioned who had remembered seeing energy efficiency recommendations (438,000 households) on an EPC, 73% said their landlord had not acted on any of the improvements listed.  

It's reported that in the region of 3.2 million privately rented sector properties in England and Wales have an EPC rating of D or below. While no similar figures exist for Scotland, the Government there has acknowledged that ‘homes in the private rented sector are more likely to be in the lowest bands for energy efficiency when compared with other areas in the domestic sector.’  

For future buy-to-lets to be viable and legally compliant, landlords are likely to have to act on recommended energy efficiency recommendations between now and 2028.   

Tenants may force landlord to make early eco changes 

A new piece of research indicates that renters are being increasingly selective when it comes to choosing the perfect property. This year’s Handelsbanken Property Investor Report revealed a wholesale shift towards more energy-conscious homes.  

Of the 200 UK portfolio landlords questioned, 58% had received a request from renters for buy-to-lets with an EPC rating of C – two grades higher than the current legal limit in England and Wales, while 95.5% of landlord participants commented that tenants have asked for some form of sustainable property feature in the last 12 months. Of those requests, 73% have been for either heat pumps, solar generation or EV chargers.  

Landlords may find themselves in a situation where their property is overlooked in favour of one with a better EPC grading. This may force changes sooner that an anticipated C-grade deadline from 2028.  

If your buy-to-let has an EPC of E or D – or there are recommendations on an EPC certificate – please get in touch. We can discuss how you can future proof your investment and appeal to a more demanding tenant sector.