You are here: Landlords, EPCs and Expenses: What’s Changing For The Rental Market

Energy Performance Certificates (EPCs) have been used as a measure of a property’s energy efficiency for over a decade. First introduced as part of Home Information Packs for those buying and selling homes, they’ve gradually crept into the rental market.

From April 2018, UK landlords will have to hit a minimum EPC level before renting their property to new tenants. For those of you who are unaware of this legislation – or wondering what it means – GoSimple are here to explain the next steps, and how you could reduce the impact of the changes…

Going green, and getting the stamp to prove it

Not all homes are cut from the same environmental cloth. Older properties tend to be particularly inefficient, since they weren’t built with the same considerations that guide construction today. This makes it costlier to both the environment and the resident’s pocket to heat the building.

There are numerous ways to limit the energy output of any given building; solar panels, modern boilers, insulated walls, LED lightbulbs and more. Less wastage means greater savings, which is an attractive selling point for tenants looking to rent.

EPCs clearly outline a property’s energy requirements, so tenants can know what they’re paying for. It’s been a mandatory certificate since 2008, and they’re available for any landlord or prospective tenant looking at the rating of a property.

Prices for an EPC vary, relevant to the building’s size, location and bedroom count. They could be as little as £35 or stretch closer to £80 or £90. But there’s a set fine for failing to provide one to tenants - £200, which is not worth risking.

EPCs for rental properties
EPCs for rental properties

So what’s different in 2018?

While EPCs have become standard practice in the rental market, big things are happening in the government’s push for environmentally friendly properties. Whereas just having the EPC has been enough to date, from April 2018 there will be a minimum rating that landlords must adhere to.

Any residential property receiving new tenants in or after April 2018 must have a rating of between A and E, otherwise landlords could face a penalty of up to £5000. By April 2020, the same rules will extend to all private rental properties with existing tenants.

Some estimate that as many as one in six UK properties might be liable if they don’t prepare for re-assessment. Changes might be small or extensive; in any case, it’s vital to be aware of your EPC rating, including how to boost the rating to an E.  

Tracking your EPC expenses

While getting certified and making necessary changes might be daunting, EPC costs are tax-deductible as part of what you owe to HMRC. In your Self Assessment, the price can be claimed back at the end of each tax year – the issue is remembering to log it for every one of your rental premises.

Article written By Tracy Eastham, GoSimple Software Ltd