Leading lettings expert and Past President of ARLA Propertymark, Maxine Fothergill outlines the changes and offers advice on how to prepare – and to have your say!
The Government’s recent consultation on Energy Performance Certificates (EPCs) proposes significant reforms to reshape how energy efficiency is assessed across the UK housing market. While these changes aim to align with net zero goals by 2050, they also raise concerns about cost, practicality, and their potential impact on the property sector.
Let’s explore what’s being proposed and how it could affect homeowners, landlords, and tenants.
Why are changes being proposed?
EPCs were introduced in 2008 as part of efforts to decarbonise the UK’s housing stock, which accounts for around 20% of national greenhouse gas emissions. The certificates assess a property’s energy efficiency and recommend improvements, with landlords and sellers required to provide one when marketing a property.
However, the current system has faced criticism for being outdated and inconsistent. For example, properties with heat pumps—a low-carbon heating solution—may receive lower ratings due to electricity costs, despite being more environmentally friendly. The proposed changes aim to modernise EPCs, making them more accurate and useful for property owners and tenants.
Key proposed changes
1. Introduction of New Metrics
The government plans to replace the current two headline metrics—the Energy Efficiency Rating (EER) and Energy Impact Rating (EIR)—with a broader set of measures. These include:
- Energy Cost: Predicts running costs for energy use.
- Fabric Performance: Assesses insulation and thermal efficiency (walls, roof, and windows).
- Heating System: Rates the efficiency and environmental impact of the heating system.
- Smart Readiness: Evaluates the ability to integrate smart technologies, such as smart meters.
These changes are intended to give property owners and tenants a clearer understanding of energy efficiency and where improvements are needed.
2. Reduced Validity Period
EPCs currently last for 10 years, but the government proposes reducing this to as little as two years, with other options including five or seven years.
This would require more frequent assessments, increasing costs for homeowners and landlords. For landlords, EPCs must remain valid throughout tenancies, meaning mid-tenancy renewals could become a regular requirement.
3. Expansion of EPC Requirements
The proposals suggest requiring EPCs in more scenarios:
- Holiday Lets: Short-term rentals would now need valid EPCs, regardless of who pays energy bills.
- Houses in Multiple Occupation (HMOs): An EPC would be required whenever a room is rented out, applying to the entire property.
- Expired EPCs: A new certificate would be needed immediately upon expiry, even if the property isn’t being sold or let.
4. Heritage Properties
Currently, listed buildings and those in conservation areas are often exempt from EPC requirements. Under the new rules, all heritage properties would require EPCs, though exemptions may still apply if improvements would significantly alter the property’s character.
5. Stricter Compliance and Higher Penalties
Penalties for failing to provide a valid EPC could rise from £200 to £325 or £400, reflecting inflation and stricter enforcement.
My views on the proposed changes
Having trained as an EPC assessor, I’ve seen how the system operates from both a technical and regulatory perspective. While I support the government’s commitment to improving energy efficiency, I have concerns about the practical impact of these reforms:
1.Cost Burden: More frequent EPC renewals and the associated costs of energy efficiency upgrades could strain property owners, particularly landlords managing large portfolios or older properties.
2. Impact on the Private Rented Sector: Landlords are already grappling with rising costs and stricter regulations. These changes could push more landlords out of the market, reducing rental supply and driving up rents.
3. Limited Environmental Impact: The UK contributes just 1% of global carbon emissions. While every effort counts, placing such significant financial and administrative burdens on property owners may not deliver proportional climate benefits.
4. Noise Abatement Issues with Heat Pumps: Heat pumps, often seen as a solution for low-carbon heating, can create noise that may trigger complaints, adding another layer of complexity for property owners.
Implications for property owners and tenants
For Homeowners
The new metrics will provide better insights into energy efficiency, potentially helping homeowners reduce energy bills. However, the cost of frequent assessments and upgrades could be a concern, particularly for older properties.
For Landlords
Landlords face increased costs and compliance requirements, including more frequent EPC renewals, stricter rules for HMOs and holiday lets, and the need to upgrade properties to meet new standards. This could discourage investment in the rental sector, exacerbating housing shortages.
For Tenants
Energy-efficient homes can lead to lower bills and more comfortable living conditions. However, if landlords pass on the cost of compliance, tenants may face higher rents.
How can you prepare?
If you own property, here’s how to start preparing for these changes:
1. Review Your Portfolio: Identify properties that may struggle to meet new requirements, such as older or heritage buildings.
2. Plan for Upgrades: Budget for energy efficiency improvements like insulation, smart technologies, and low-carbon heating systems.
3. Stay Informed: Follow updates on the consultation and seek professional advice to ensure compliance.
4. Have Your Say: Share your views by responding to the consultation, which is open until 26 February 2025.
Have your say
This is your opportunity to shape the future of EPCs and their impact on the property market. You can access the consultation and submit your feedback here:
Reforms to the Energy Performance of Buildings Regime – Consultation
Final thoughts
As a property professional with extensive experience in both regulation and practice, I see the value in improving EPCs to support sustainability. However, it’s crucial that these reforms are practical, affordable, and balanced against the realities of the housing market.
I encourage everyone involved—homeowners, landlords, and tenants—to engage with the consultation process. Together, we can ensure the system evolves in a way that benefits all stakeholders while driving meaningful progress toward Net Zero.
Maxine Fothergill is Managing Director of Amax Estates in Gravesend, a property investor with over 25 years of experience, Past President of ARLA Propertymark, a trainer for the London Landlord Accreditation Scheme (LLAS), and author of “How to Become a Successful Property Investor.”
