UK Government abandons higher Energy Performance Certificate (EPC) targets, providing relief for landlords.

Higher Energy Performance Certificate (EPC) targets for private rented property were going to come into force in 2025 for new tenancies and 2028 for existing tenancies. The proposed changes would force landlords to spend up to £10,000 on energy improvements or face hefty fines of up to £30,000.

Landlords will be relieved to learn that on 20th September 2023, the Prime Minister announced that the Government is abandoning these targets.

What are the changes?

  • Landlords will no longer have to improve the energy efficiency of let homes to at least grade 'C' by 2025 (new tenancies) or 2028 (existing tenancies). The minimum rating remains at 'E'.

What does this mean for our clients?

  • Short-term relief for landlords who will no longer need to incur significant expenditure on upgrading the energy efficiency of their properties to achieve ratings of 'C'.
  • Landlords may be inclined to approach compliance with energy efficiency regulations with some caution, given this is an area of policy prone to sudden change. For example, landlords may choose to meet, rather than beat, regulatory deadlines.
  • A future government may revisit this decision. The Prime Minister's speech showed that energy efficiency policy is now a live political issue.
  • The Government only abandoned the proposed changes; the existing regulations remain in place. Landlords granting a tenancy of a residential property for the first time will still need to meet the lower-level energy efficiency targets: the property must achieve an 'E' rating or the landlord must spend at least £3,500 on energy efficiency improvements to the home in question.
  • The EPC announcement came in addition to announcements on a delay on the ban on new oil and gas boilers, as well as coal heating off the gas grid, from 2026 to 2035. Furthermore, the existing boiler upgrade scheme will be raised by 50% to £7,500. These will provide additional relief for landlords.

Source: PM speech on Net Zero: 20 September 2023

To expand your understanding of this evolving landscape, we recommend reading our in-depth previous articles: 'EPC and MEES Regulations: What You Need to Know in 2023' and 'EPCs and MEES: What You Need to Know'.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.