Going Green: Landlords Convert Properties for Energy Efficiency

An EPC band of C will possibly be required for properties by December 2025 – but will landlords ‘go green’ and choose energy efficiency sooner?

During the recent international COP 26 hosted in Glasgow 2021, the government has made a public commitment to get to ‘net zero’ by 2050. But it looks like landlords may be taking steps to speed that up already. 

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Since the 1st of October 2008, landlords letting whole properties must have a valid EPC rated at E or above provided to their prospective tenants. But now, both residential and commercial landlords are contemplating the costs of updating their older properties to the proposed new standard, which will very likely be an EPC band of C, which is required by December 2025. 

The recent petrol shortage we saw in 2021 has driven the conversation on how we should move towards electrical efficiency

So perhaps you’re wondering how often you should update your rental properties? And we’re not just talking about renovations. By spending on older properties now to meet the future energy efficiency standard, it will also have a major impact on investment property returns over the next coming years, as the government targets their goal to ‘go greener’ and future tenants and buyers look for more eco-friendly (and economical!) homes. 

Is EPC Band C Required Now for Rented Properties?

The band is just a government proposal as of now, following a recent energy performance consultation which is included in the Minimum Energy Performance of Buildings (No. 2) Bill, now currently being reviewed in Parliament (view updates on the bill here). 

The Bill states: 

all new tenancies must have an energy efficiency performance of at least EPC Band C from 31 December 2025; and all existing tenancies must be at least EPC Band C from 31 December 20 2028 where practical, cost-effective and affordable.

Taking action now is beneficial, because dire standards not only add to the cost of heating, but it can affect the occupants’ health. According to the latest figures available from the Department for Business, Energy and Industrial Strategy, UK homes account for 15% of the county’s greenhouse gas emissions – a lot of which is down to poor insulation standards and heat that is being paid for and lost unnecessarily.

Research has also been conducted by international environmental consultants Deepki, showing that environmental sustainability in buildings can have a dramatic effect on their value. A list of actions were given in the survey, with respondents saying they were likely to address the poor ESG performance of their real estate portfolios in the future: 

  • 72% said that they would actively engage with the property management team to make improvements 
  • 61% said they would invest in improving energy efficiency 
  • 45% said they would work with a third party to develop an ESG strategy and measure performance against KPIs 
  • 28% said they would demolish and rebuild failing assets 
  • 10% said they would sell their assets

Jumpstart Into Energy Efficiency 

You may have heard the term ‘going green’ as a phrase that has been tossed around quite often, but how can landlords go about doing that exactly? 

Since energy efficiency is a huge element we all need to consider in both present and future projects – it’s best to get a head start now by making sure you are ready. Here’s a quick refresher on energy efficiency and what you can do to get a jumpstart.

  • Plan ahead. Although there’s still uncertainty about what final rules will be set, the fact remains that sooner or later changes to these standards will be in place. When it comes to energy efficiency, certificates are awarded from A (most efficient) to G (most inefficient). A property with high efficiency is more affordable to run, with utility bills like gas and electricity being lower than in homes with a high inefficiency rating.
  • Check your status. EPCs are critical because they contain information about carbon dioxide emissions, fuel costs and the details of the person or company that carried out assessments. It’s best to verify your energy efficiency status by checking up on your recent EPC! At Mashroom we can organise your EPC for you which will be carried out by qualified domestic energy assessors. 
  • Get up-to-date. Each EPC is valid for 10 years, but will only need renewing once a new occupant moves into the property after a decade. That means you can market a property either for rent or sale multiple times within 10 years without needing to renew your EPC.
  • Find out more. For more information on guidance, check out our Guide to Energy Performance Certificates (EPCs) here for a breakdown on EPC’s, and if you need one for a buy-to-let property

Climate change, fuel and energy efficiency are still very much on the world’s radar, and will only intensify into the future. It’s best to start preparations now so you can ensure you’re playing your part in a greener world by sticking to guidelines that will eventually come into place. 

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