With the rules set to drastically change in 2025, some Landlords are feeling short changed by the government’s nuclear decision to enforce EPC standards that a whopping 64% of rental properties are predicted not to meet.
So what are the legislative changes the UK government are set to put into place, what exemptions are available and how does it affect you as a Landlord?
Let’s find out.
EPC 2025 Regulations - What Are They?
With the Government firmly fixed on achieving net zero by 2050, new rules surrounding the Minimum Energy Efficiency Standards have just come to fruition.
The new set of legislation dictates that by 2025, all new tenancies must meet a minimum EPC rating of C and above. In 2028, this legislation extends to all residential properties & teancies within the private rented sector.
(If you’re a commercial Landlord, you’ll need to be aware of the MEES changes that are set to take place later this year.)
Keeping in mind the bombardment of legislative changes over the past few years, some Landlords feel like these changes are the final straw, opting to sell up and leave the PRS before the situation worsens.
And it’s easy to see why. With very little support in place, 87% of Landlords are expected to brunt the full cost of these improvements with little to no funding or grants available.
With the average EPC improvement from a rating of E to C currently standing at around £6000, the financial impact it can have on Landlords with larger portfolios can be absolutely devastating.
Are there any exemptions available?
Certainly. You could meet exemption criteria which we recommend checking against. We previously wrote a blog surrounding improvements that can be made to your rental properties and the exemptions available which you can read by clicking here.
However, one noteable exemption which is set to change in 2025 is the High Cost exemption. Under current legislation, if the cost to make your property meet EPC requirements exceeds £3500 inc VAT, you’re eligible for something that’s known as a High Cost exemption.
Unfortunately, this once again is set to change in 2025. From 2025 onwards, the cap of £3500 will be raised to a substantial £10,000.
This means that you can only apply for an exemption if the cost of involved works exceeds the new amount, forcing many Landlords to cough up on expensive refurbishments.
Penalties for Non-Compliance
Under existing legislation, failure to comply with Minimum Energy Efficiency Standards could see Landlords penalised with fines of up to £5000 per property issued by local authorities.
From 2025 onwards, the fines are set to increase monumentally. Landlords are expected to see fines of up to £30,000 per property if they fail to comply with the Government’s new legislation.
So what happens next?
Well, it’s hard to believe that the government would crucify the private rental market by making said 67% of homes unavailable by 2025. We’re seriously hoping this isn’t the case.
Alternatively, we have our fingers crossed for some degree of government support to be provided to those struggling to meet the minimum energy efficiency criteria.
However, it’s better to be prepared. We seriously suggest to those whos properties don’t already meet the deadline to start gearing up and making incremental changes, as the penalties for non-compliance as we’ve already seen can be crippling.