Landlords who need to update their buy-to-let property to meet new energy efficiency guidelines may feel they have an enormous task ahead. But, as Trudy Woolf explains, there are some straightforward changes you can make to prepare ahead of time
Whether you own an extensive portfolio or rent out a property to top up your income, landlords have a lot to handle when it comes to property legislation.
This is equally true when it comes to energy efficiency. However, by addressing the challenge early, improving energy efficiency ratings can become more manageable.
The UK market is adapting to a more environmentally-conscious landscape. By 2025, it is anticipated it will be a legal requirement for newly rented properties to have an Energy Performance Certificate (EPC) rating of C or above.
By 2028, the same requirement will apply to all existing tenancies. Any failure to comply with these rules could result in penalties of up to £30,000.
However, there are steps property owners can take to avoid missing this expensive deadline and bolster their EPC ratings in the process.
An EPC will show the estimated energy costs for a property and what its carbon dioxide emissions are likely to be, alongside a series of recommendations to make the property more energy efficient.
However, it only provides an estimation of how much a home might cost to run. It does not provide actual, real-life energy usage and performance of the building to which they are attached.
It is important to note that EPCs are a somewhat controversial topic. In the past, EPCs have been criticised, as some measures might reduce carbon emissions but increase energy costs. The government has acknowledged consumer and industry concerns about the system. In the Autumn Statement, Chancellor Jeremy Hunt announced the creation of an Energy Efficiency Taskforce, alongside £6bn in funding for energy efficiency improvements to buildings for three years from 2025.
Energy efficiency regulation, then, is at the forefront of policy. The upcoming legal requirements do look daunting, and it’s sometimes tricky to know where to start. However, futureproofing a property is not always as complex or expensive as you may think. In fact, some straightforward actions can go a long way.
More traditional improvements can offer a dependable fix. You should ensure your property’s walls, floors, and loft are properly insulated with a thick and compliant material, such as mineral wool.
This can include installing cavity wall insulation, which on average costs between £370 to £500 to install.
Of course, some older properties, such as Victorian terraces, may not have cavity walls. In fact, people with steel or timber framed properties should not cavity fill at all, as the work could cause damp issues and make the property unmortgageable.
This is why it is paramount to get expert advice on the construction of your property, as some energy efficiency solutions may not be suitable.
A property’s windows can also affect the overall EPC rating. The overall positive effect isn’t on the same level as wall or loft insulation, but reducing the heat lost through windows is key to improving your property’s energy efficiency.
For instance, should you own an older property with single-glazed windows, paying for double-glazing could uplift an EPC by five to 10 points. This is typically priced between £2,000 to £5,000 for a terraced property.
If a door is draughty, it is worth considering fitting a better one, especially if it has fewer gaps. Many door manufacturers use the BFRC (British Fenestration Rating Council) scale to measure the energy efficiency of their products.
Purchasing a door made from sturdy compound products might reduce the amount of heat loss by a substantial margin.
It will come as no surprise that heating systems are at the core of an EPC assessment. In many ways, it might be the most important consideration of all.
Switching out an older boiler for a new model could ratchet up an EPC score by as much as 40 points – potentially lifting a property up to the right standard in one clean move.
Of course, these investments are costly. A new boiler can cost between £1,000 and £3,000. In the end, it is up to the owner to judge which investment will meet their immediate energy efficiency in the most cost-effective way.
Overall, the proposed changes to the minimum EPC requirements do present a genuine challenge for many, some solutions, such as installing energy-efficient lightbulbs, are minor. Others, like investing in a boiler, are a longer-term investment.
Landlords might even consider investigating how tenants use the property, and advise a range of steps, such as turning off the light when a room isn’t in use, or pre-heating a property ahead of peak times to access cheaper energy tariffs.
Every property is different, and there is a chance some landlords will need to take some dramatic measures ahead of 2025. However, spending a little money now is vital if the BTL sector is to protect its portfolios and safeguard its income streams in the future.
Trudy Woolf is a director of sustainability at Legal & General Surveying Services
