The Government Forcing Landlords To Get Better EPC Ratings! – Q&A Sunday

Every week I answer questions put to me by my audience on YouTube. If you would like your question answered next week on anything about property, whether it be about multi-lets; rent2rent; lease option agreements; deal packaging; bridging loans; capital gains tax or anything else, comment on the YouTube page for this video. I will answer as many of the questions that I get on property investment in the next video as I can.

I got a really good question about EPC ratings, and a lot of people have been asking about this topic. So, I thought I would highlight the question on my blog. Here it is:

Andrew Crampton says…

Be good to get your thoughts on the minimum EPC increase to a C by 2025 that’s proposed by the GOV…..

My reply….

Okay, so what that means is EPC stands for energy performance certificate. So, every residential house will have an EPC certificate. The certificate could be anywhere from an A up to an E. An A means that the energy performance of the house is really, really efficient; it’s really, really good. Not many houses are A’s or even B’s. Most properties tend to be C’s or D’s. If it’s any higher than an E, then you cannot rent the house out because it means that it’s not insulated properly.

However, what the government is saying is that they’re going to increase the standard of EPC ratings from an E to a C. What do I think about that? Well, for a start it’s going to affect a lot of landlords because I think about a third of landlords say that they’re going to be affected by this.

A lot of properties, especially older-style properties like Victorian houses, are D’s; some of them are even E. So, the fact they’re saying it has to be a minimum of a C is going to mean that a lot of landlords are going to have to spend some money, and it could be thousands of pounds to bring down the rating. Landlords might have to get solar panels or other energy saving devices.

To be fair, you can moan about these things and you can say, ‘Isn’t it terrible some of my properties won’t comply, I’m having to spend money’ and I understand why landlords are upset, but there are some things that you just can’t control. I’m not going to start a petition and say, ‘ oh, it’s terrible’ because actually it’s not a bad thing that houses are more efficient. I’m not going to stand here and start a petition and say the government shouldn’t change the standard.

I’m sure some of my properties, many of them, are D’s and I’ll have to try and make them better and maybe spend money. However, at the same time our rents are going up at the moment, interest rates are very, very low and there’s some mortgage lenders, like the Mortgage Works who are saying that

they’re going to reward people for bringing up their energy performance certificates. They’re actually offering 1.5% interest payments, which is just ridiculously low!

So I think rather than moaning about spending a few grand or whatever, I would probably say there are some landlords that are going to sell up which creates opportunity. There’s opportunity and disappointment; it’s a combination but you’re always better off seeing the opportunity. It’s good to have properties that have got a good energy performance certificate. It’s good for you; it’s good for the tenants; and it’s good for the environment.

Overall, I am not too worried especially as we’ve been given four years’ notice. Also, the government are offering grants for energy efficiency (I’ve done a video about it before). So, overall I’m reasonably positive about it, even though it will be a little bit of an inconvenience for sure.

That’s my thoughts, I hope that helps Andrew. Let me know generally what you think. Do you think it’s a good thing or a bad thing? Let me know on the YouTube page for this video!

To see all the other questions that I was asked and my answers to them, check out the full video here.

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