If you’re a landlord and looking for help to provide greener and cost-effective energy to your properties, then let us explain why upgrading your portfolio is even more important than ever.
Buy to let properties need to be upgraded to EPC Rating of C
Buy-to-let properties lawfully require an EPC rating of E when rented to tenants. However, this is due to change by 2025 when all properties will need to upgrade to an EPC rating of C and above.
This complies to new tenants renting the property.
For dwellings with existing tenants the cut-off date is 2028.
This means that you have a few years to start thinking about how to make these upgrades. The consequences for not doing so, are by all means, pretty extravagant with fines being reported of up to £30,000.
This means that landlords with existing tenancies have a 5-year window to upgrade their portfolio and spread the cost over that period.
If the properties have new or recent tenants, then it needs to be upgraded by 2025.
The cost for improvements is looking to be capped at £10,000 and when you reach this figure you will need to ask for an exemption.
Keeping records of all improvements and associated costs will be required when applying for an exemption.
How can landlords afford to upgrade their properties in such a small window of time?
It’s reported that over 60% of properties in England and Wales fall into the D Rating for energy performance. You can check your properties here:
Taking a property from D-C can actually require some simple methods, however, landlords may have a more costly pursuit when taking a property from E to C rating. Also, the amount of tenancies in the portfolio will ultimately decide on the best method to approach this.
The good news is that 2022 is probably the best time to start conversations with an energy consultant.
The Government is pushing hard to reduce the country’s carbon footprint and there are suitable funding streams that landlords can take advantage of while they’re still available.
The boiler upgrade scheme for landlords
Landlords can apply for the boiler upgrade scheme to help decrease the carbon footprint of a property.
The Boiler Upgrade Scheme is a government-backed scheme that provides upfront capital grants to support the installation of heat pumps and biomass boilers in homes in England and Wales.
Acting on behalf of property owners, installers can apply for:
- £5000 off the cost and installation of an air source heat pump
- £5000 off the cost and installation of a biomass boiler
- £6000 off the cost and installation of a ground source heat pump, including water source heat pumps
£450 million of grant funding is available over three years from 2022 to 2025. This scheme is part of the government’s wider commitment to decarbonise heat in buildings and reduce emissions by 80% by 2050.
The Government has also introduced 0% VAT on materials and installation so be sure to check quotes provided by heat pump installers. This should reduce the price significantly.
Energy Company Obligation Grant
The ECO funding scheme is now in its fourth iteration with a primary focus on improving a properties EPC rating.
Tenants in private rented properties can apply for these grants providing they meet the criteria.
The range of measures include combined energy saving installations such as Solar PV, external and Internal wall insulation and Air Source Heat Pumps.
If the tenanted properties fall into an EPC rating of E or D then it will be open to more measures that could include renewable appliances to help lower the cost of the energy bills.
Combined with 0% VAT and 0% Interest, this could be the most likely step for most landlords.
New combination boilers with a ten-year warranty on parts and labour are pretty common these days and with a new thermostat and TRV’s, this could make a significant difference.
Combine this with loft and cavity insulation and you’re certainly on the way to retaining the heat. However, the one measure that will take you into the C bracket after installing the other measures is solar.
Finance packages are becoming available throughout the year.
See our examples below.
What measure would be recommended to improve an EPC Rating?
Nothing is set in stone until you get an up-to-date EPC and possibly a correct survey. Most Energy Performance Certificates have an assumed description.
So for example; the assessor may not have access to a suspended floor, so it will be assumed that this is uninsulated depending on the age of the property.
Semi-detached house with an EPC Rating of E
As an example, let’s use a fictitious semi-detached home with a loft conversion and extension.
It has an uninsulated suspended floor, solid brick extension and cavity wall. A relatively new boiler but radiators that are over 10 years old.
How could we take this from E to D?
- Insulating the walls would help save £264 per-year*
- Insulation the suspended floor would help save £66 per-year*
- New or smart heating controls would save £22 per year*
- Low energy lighting will save another £22 per year*
How could we take the property from EPC E to C?
This requires the introduction of renewable tech. So, it’s suggested that you combine all of the above with Solar PV.
*current energy prices and information provided by https://find-energy-certificate.service.gov.uk/
If you’re a landlord and would like more information on how you can upgrade your property portfolio, please contact a member of our team to help you understand the options available to you.