April 1st this year was not all laughs and jokes for many in the private rented sector. After all, there’s nothing funny about a £4000 penalty and a rental property that isn’t making a profit. Landlords and letting agents across the country have been gearing up for the onset of the new Minimum Energy Efficiency Standard (MEES) since they were introduced as part of the updated Energy Efficiency Regulations in March 2015. In basic terms, the new regulations mean that:
- all rental properties must now have an EPC rating of E or higher for new tenancies;
- granting or renewing tenancies on properties which do not meet this standard is illegal;
- landlords who are letting properties with an EPC rating of F or G will face penalties, and;
- such properties can only avoid these penalties if the landlord secures a legal exemption.
April 1st has passed, and with that changes to the MEES outlined in 2015 are now in full effect. If you currently let a property that falls below the E rating, it is now imperative that you work on the renovations necessary to improve its EPC rating in order to legally let that property again. Landlords who won’t be renewing or granting tenancies in the near future are not “off the hook” – as of April 1st 2020, the new MEES will apply to all tenancies whether they are new or not. The main takeaway from all of this is that making energy efficiency improvements to your underperforming properties is non-negotiable.
As with any matter of legislation, there are many nuances and complexities to the new MEES, the likes of which we covered in detail in our previous blog post on the regulations themselves. However, in this article we’ll be going over some practical steps that show you how to improve EPC rating on your residential properties. Doing so will not just help you dodge civil penalties; in the long term they will also reduce the negative impact of your properties on the environment, as well as significantly reduce the cost of utility bills for both you and your tenants.
Adding any form of insulation to your property will help ensure a better EPC rating straight away. Proper insulation helps your property maintain heat and therefore reduce the loss of energy, although landlords should note that insulation often comes with a hefty price tag. Nevertheless, those with the funds required to fully insulate an uninsulated property would likely benefit from a large increase in their EPC rating by doing so. This will benefit your property in the long term, giving it a high enough rating to ensure it stays compliant with any future changes to the MEES (legislation may eventually require that all rental properties have a minimum EPC rating of C). When it comes to the fine art of landlord-ing, it’s always best to think one step ahead!
There are of course several different types of insulation that can be added to any given property, with the most suitable depending on the individual demands of that property. Options include:
- Loft insulation – This is perhaps the most common and accessible type of insulation. You can even do it yourself by placing rolls of wool between the floor joists in your loft.
- Wall insulation – Wall insulation is best left to a professional and is often pricey. Solid walls and cavity walls can be insulated, with both involving different procedures.
- Floor insulation – Possible methods include installing rolls of wool beneath floorboards, sealing gaps in the floor (or below skirting boards), and putting down area rugs.
- Window insulation – On top of installing some FENSA approved triple glazed windows, you could reseal the windows with caulk and add some insulating window coverings.
- Flue insulation – Unused flues (e.g. in fireplaces) can be a major source of energy loss. Be sure to use professional insulating materials and not just newspaper or plastic bags.
- Water tank insulation – Most water tanks will already have an insulating layer of foam, but doubling up with an insulation jacket will help further improve energy efficiency.
Boilers and heating systems are crucial factors in deciding the final EPC rating of your property. Energy assessors will be noting down features such as: the type of boiler used in the property; the settings of the boiler; any room thermostats or thermostatic radiator valves in the property; the type of fuel used in any fireplaces; and the presence of any outdated forms of heating like storage heaters and propane heaters. The aim is to make the property more energy efficient by replacing older and more wasteful heating systems with new ones. If you have an old property, don’t be surprised if this turns out to be an expensive process!
Which types of boiler are most likely to result in an improved EPC rating for your property? Generally, condensing boilers are your best bet as they often claim over 90% energy efficiency. Compare this to older models such as fire and back boilers and open-flued cast iron boilers, which are G-rated by modern standards and can only claim around 60% energy efficiency. Although expensive, replacing these older models with a high efficiency boiler will see an improvement in the EPC rating of your property by approximately two bands. As a rule of thumb, shop for boilers with an energy efficiency rating of A or B. In addition to replacing an old boiler, landlords should consider installing thermostat devices throughout their property as these further help to reduce CO2 emissions by regulating the use of fuel in separate rooms.
A landlord should expect bonus points for running their property on alternative energy sources, such as solar power or wind power. However, these measures require lots of time and money. We would not expect landlords switch their energy source just to stay compliant with the MEES, especially since there are cheaper, easier, and quicker ways of improving your EPC rating. However, if your property has a working fireplace, you could make the switch from coal to wood – the latter will prove better in terms of energy efficiency and more favourable for your rating.
Making efficient changes to the way your rental property is lit will help improve your EPC rating. Many properties still make use of traditional light bulbs of the fluorescent or incandescent variety (the kind with a filament), which are outdated in the context of our green economy. Instead, landlords should invest in replacing all the lightbulbs in their property with more efficient models: namely, LED or CFL light bulbs which use up much less energy on the whole. Easy to install, cheaper in the long run, and better for the environment, this type of lighting can be a quick fix, pushing your EPC rating up just enough to ensure that your property can be legally let again. Sometimes its the smallest changes that make the biggest difference!
Preparing for an EPC survey
You can’t ensure the improvement of you EPC rating if you don’t get an updated EPC certificate. These cost around £50 to £100 to get renewed (shop around for quotes to get the best deal), and last for 10 years until they expire. The new regulations have been in effect since April 1st, so it is essential that landlords make some of the above improvements and renew their EPCs (especially if they intend on renewing or granting tenancies in the coming months). By the way, you don’t have to focus on all of the above improvements – only those which will bring your property up to at least an E grade. Pick and choose from changes that meet your requirements, such as budget, convenience, timeframe, and of course the needs of any current tenants.
In order to fully prepare for your upcoming EPC survey you need to understand what to expect. What will the assessor be looking for in your property? What will factor into their final grade? And what kind of questions will they be asking you in the process? Every survey is different, though generally speaking the EPC assessment process will involve the following:
- Taking external and internal measurements of the property.
- Identifying the methods of insulation used throughout the property.
- Inspecting the windows to find out which type of glazing they incorporate.
- Gaining details about the construction of the property and any past renovations.
- Looking into the heating systems used in your property (boilers, controls, emitters).
- Checking for the use of energy efficient appliances, products, and power resources.
Once you have a good idea what the assessor will be looking for when reviewing your property, you should do everything you can to make the survey runs smoothly. Before the survey, assemble all of the documentation relevant to the construction and renovation of your property, as well as documents relating to individual improvements (all receipts for past renovation work, handbooks for boilers and appliances, FENSA certificates for your windows, and so on). Why? Because you may be asked for evidence of these improvements during your EPC survey, especially for improvements that cannot be easily accessed such as insulation in cavity walls.
Finally, you should make sure that certain areas of your property are accessible to the assessor, such as your loft space. If you have full insulation in your loft and around your hot water tank, you should enable the assessor to see those improvements in person – so get the ladders out! You don’t want them to be making negative assumptions about the efficiency of your property (and downgrading your certificate) simply because they cannot access certain parts of it.
Oh, and make them a cup of tea too, because… well, every little helps!
If you are a prospective landlord currently looking to purchase a new property in South West London, feel free to check out the sales we currently have available or have a chat with a member of the James Anderson team.