Tue 01 Mar 2022
In the first of a series of guest comments from peer professionals in the property sector who work with Shouler & Son, Colin Smithson-Connelly, a domestic energy assessor with Sycamore Energy Assessors Ltd, explains EPCs.
Energy Performance Certificates (EPCs) were introduced to the residential property sector in 2007 when they became part of the necessary documentation for sales and lettings.
It is mandatory for the EPC and its grading to be available and, indeed, part of the material at the point of the property being marketed - usually by the agent in the case of most properties.
The process of an energy performance assessment - conducted by an accredited and professional energy assessor - leads to the issuing of certification to grade the property from ‘A’ to ‘G’.
The most energy efficient property scores an ‘A’ grade with the worst performing indicated by ‘G’.
The aim of an EPC is not only to give a guide to potential purchasers or tenants about how energy efficient the property is currently, but also the scope for improvements to increase the energy performance.
To date, EPCs have been of far more interest to prospective tenants than purchasers because renters are not in a position to make substantial improvements affecting energy performance of properties in the same way as owners.
Tenants should be mindful in renting a property because the monthly rent may be cheaper in reflecting a lower EPC rating, albeit rental levels are guided by far more than EPC ratings in reflecting wider market considerations.
The lower the EPC rating, the higher the energy running cost is more than a rule of thumb. Additional fuel costs can often far outweigh the money saved on the monthly rent.
For landlords, energy performance levels and the financial feasibility of improvements to any rental property will be part of the discussions with the letting and/or managing agent in setting the rental level and fees.
Since 2018, the minimum EPC level for rental properties has been a rating of ‘E’.
Unless there are exceptional circumstances - such as Listed Properties or particular types of legacy tenancy agreements - and an exemption is obtained from the relevant authority, it is unlawful to let a property only achieving an ‘F’ or ‘G’ rating.
There is a target set to raise the level for rental properties from ‘E’ to ‘C’ by 2025, but there is ongoing discussion between property advisory and energy professionals and organisations representing landlords and the governing authorities ahead of this proposed date of introduction.
EPCs are becoming of more interest to prospective purchasers as energy costs rise – this is something on which, as energy assessing experts, we are getting more enquiries year on year.
To improve an EPC rating will depend on how efficient the property is already but there are simple things that can be done.
For instance, converting from standard lightbulbs to low energy or LED bulbs and adding insultation to a hot water cylinder are two of the simplest ways.
Most wholesale improvements require a competent, professional tradesperson to carry out the work across a range of measures including loft or cavity insulation, installing room thermostats or radiators with thermostatic radiator valves (TRVS).
There are grants available for some energy improvements and they are usually means tested in relation to low or benefit-related household income.
A mix of legislation, rising energy costs, and environmental concerns in the coming years can only drive interest in energy performance and a focus on EPCs when it comes to property rental or purchase.
Colin Smithson-Connelly has been a domestic energy assessor with Sycamore Energy Assessors Ltd since the company was established in 2007. Since its formation, the company has carried out over 20,000 assessments for Energy Performance Certification.
Based just outside Melton Mowbray, it offers independent energy services and advice to clients in Leicestershire, Nottinghamshire, Lincolnshire, Rutland and throughout the rest of the East Midlands.
Shouler & Son has worked with Sycamore Energy Assessors Ltd for over 13 years on energy assessments and certification for sales & rental properties.