EPC C Rating 2025: Everything Landlords Need to Know

Change is coming and landlords will need to be aware of it if they wish to continue letting out properties beyond 2025.

A government proposal set out late in 2022 stipulates that all landlord properties must have an EPC rating of C or better by 2025 when newly let, or by 2028 for properties already under tenancy.

Instigated as part of the plans to hit net zero by 2050, this proposal could see significant changes in the rental market as landlords are forced to decide on whether they should invest and upgrade or look for a fast house sale to turn it into a quick win.

What is the EPC rating?

An EPC, also known as an Energy Performance Certificate, is used to judge the energy efficiency rating of a property. There are 7 ratings from A-G, with A meaning the property is the most efficient, and G meaning it is the least.

The higher the rating, the lower your tenants can expect bills to be, which can be a huge benefit when advertising the property. Currently, as a landlord, you should be ensuring an EPC is provided for tenants and that a new one is obtained every 10 years.

What are the current EPC regulations for landlords?

At present, any property you rent out must have an EPC rating of E or above for it to be accepted onto the rental market. The EPC you obtain will be valid for 10 years and will only need to be replaced after this time if you are letting the property out to new tenants.

With the proposed change meaning that landlords will have to significantly improve their properties to bring them in line, we could start to see more rental properties being sold off.

What are the EPC C regulations for 2025?

By 2025 a property will only be suitable to let if it has an EPC rating of C or above. This ruling will apply to newly rented properties. Where property is already under tenancy, landlords are being given until 2028 to make their property compliant.

Failure to bring the property up to this level could result in a penalty of as much as £30,000 for a landlord. Compare this to now, where the fine stands at £5,000 and it again lends itself to the fact we could see many landlords looking to sell property fast as the costs to bring it up to standard may be too high, and the fines issued just too damaging.

At present though, it is worth remembering that this regulation is just proposed. Things could change, but with the potential investment to bring a property up to standard looking expensive, it would make sense to start the work now to protect yourself once the new rules are passed.

How can I get my property to EPC C for 2025?

Depending on how many properties are in your portfolio may determine how best you attack the change. You could invest now across all your properties and have them all ready for 2025, or work gradually having one at a time bought up to standard. The problems here though lie in the fact that many jobs cannot be carried out with tenants in situ. So, do you wait until a tenancy is up before starting, or remove your property from the rental market and begin work?

Either option results in a loss of income and with it expected that properties could need as much as £17,000 spent on them to bring them up to the suitable standard it becomes a quandary as to what the best option is.

The latest govt calculation state that the average cost per property will be around £4,700, which may bring a little respite to some landlords. However, the price will vary on the age of the property and the current EPC it holds.

Alternatively…..

Do you consider selling a buy-to-let property? After all, residential properties that are not on the rental market do not have a minimum EPC rating requirement.

Assuming you do decide to invest in the necessary upgrades to your property, there are a few things of low-cost you can start with that will help bring your property to an EPC C rating for 2025:

• Insulate walls
• Insulate floors
• Insulate cavities
• Install a smart meter
• Switch lights to LED lighting

You could also look at the current EPC and look at all recommendations, some may provide you with quick-fix solutions.

In many cases, this will not be enough though, and thought should also be given to more CAPEX expenditures like more efficient boilers, solar panels or new windows.

Is there support for landlords to get an EPC C rating by 2025?

With the costs likely to be something that could make you baulk at whether the rental market is still something you want to be part of, you will be pleased to know there is some government support likely, the issue for many landlords here though is that the property may not be eligible for such support.

The EC04 scheme will help mitigate costs for landlords that:

• Own a rented property that has an EPC rating of E or below.
• Let property to tenants who have claimed benefits in the last 18 months.
• Own a rented property that falls within a council funding area.
• Let property to tenants who meet the requirements of the local authority’s flexible energy rules.
• Let property to tenants that claim child benefit.

In some cases, you can also apply for an EPC exemption however there are certain caveats around this. The govt website gives a detailed assessment of what property can be granted an exemption.

Should the need for significant investment in your property be concerning you, or the potential fines for not reaching the relevant EPC grade by 2025 be a worry, speak to Gaffsy. Our property experts are fully versed in the buying and selling of properties of any type. In fact, we buy any house, regardless of your EPC rating. This way you can take the proceeds from a fast sale and either invest in the rest of your portfolio or utilise it for any other purpose. With a team of cash house buyers ready to snap up any property, speak to us today and have your property sold in days not months!