EPCs - Do You Know The Law?
Whether you are a property owner, landlord, tenant, contractor, or otherwise, it is essential to know the current and proposed laws surrounding energy performance certificates, or EPCs.
An EPC is essentially a guide to how efficiently a property uses energy, the cost of running the property, and recommendations on how to potentially improve the energy efficiency of the property.
An EPC is required whenever a property is built, sold, or rented. New owners or tenants should have access to the property EPC before any agreement is reached.
EPCs currently give the property a rating from A to G depending on its energy efficiency. A is highest level of efficiency with G being the lowest. EPCs are currently applicable for 10 years before another inspection by an accredited assessor is required.
In March of 2015, the Secretary of State for Energy and Climate Change approved new energy efficiency regulations. These regulations are due to bring about a number of new standards, one of which is the Minimum Energy Efficiency Standards (MEES).
MEES is a new law that will introduce a new minimum energy efficiency standard for commercial buildings. The new MEES law will introduce a minimum standard of E, meaning that buildings cannot be rented if they are rated as an F or G on the scale. The law will come into effect for new leases and renewals from April 1, 2018. From April 1 2023, this will apply to all leases.
These new law changes come after a number of damning reports suggesting that a number of commercial and residential properties in the United Kingdom have extremely poor energy efficiency.
Analysis of EU data in 2013 publicized that homes in the United Kingdom are some of the most expensive to heat in Europe because of poor insulation and general low standard of maintenance.
More recently, a 2016 report from the Association for the Conservation of Energy revealed that over one-third of non-domestic buildings in London were rated E or lower on the EPC scale.
In London, 37% of buildings were given this grade, in comparison to just 34% that achieved a rating of C or higher. Perhaps most troublingly for England’s capital is the 18,000 non-domestic buildings that rated F or G.
While it is vital for landlords, investors, developers, and lenders to know the law, it is even more essential that everyone is aware of how to adhere to the new law and the changes that can be implemented to ensure that energy efficiency ratings in properties remain an E or above.
Initially, it is extremely important that you know if any of your buildings are at risk of falling below the accepted level of the new standards. Furthermore, it is indispensable that you analyse your existing leases. Requirements like rent reviews may not have been drafted with the new MEES law in mind. You should also complete any work that needs doing to your properties well in advance of the legal changes in April of next year. Getting these changes fixed early will ensure that you avoid the inevitably higher costs later on, whilst also adding early value to your properties.
Improving energy efficiency does not require a major overhaul. There are some simple alterations and additions will ensure that a property jumps up its EPC ratings immediately.
- Confirm that the central heating systems in your properties are competent, specifically the boiler. An aged, floundering system could have an immensely adverse influence on your energy efficiency rating. While this is a fairly costly task, the finances pale into unimportance when likened to the prospective penalties that will be forced if any properties are beneath an E rating when April 2018 rolls around.
- You must also make sure that your loft and walls are insulated sufficiently. Older buildings are likely to have comparably poor insulation, especially in the loft. This can make a huge difference to your energy efficiency rating if done properly. Loft insulation in modern homes ideally should be around 270mm in depth. If your insulation is below 90mm you are able to apply for governmental funding to have the depth increased. You are also able to apply for funding to improve the insulation in your cavity walls if the current situation is not sufficient.
- Always try and consider renewable technologies when improving the energy efficiency of your properties e.g. solar panels. The efficient, long-lasting, bill reducing performance of these technologies will far outweigh their initial purchase and installation costs and will make your properties extremely desirable to potential buyers and tenants.
- Even minor fixes and alterations like changing halogen or any high-energy bulbs and replacing them with LED’s or low energy alternatives will ensure that your properties energy efficiency rating is vastly improved and are ready for the new laws set to take effect next April.
Jason McGrinder is a qualified domestic and non domestic energy assessor and also director of EPC For You. He started in the fledgling energy efficiency sector in 2008 when based in London and trained with Habitus Surveyors and has since then started his own company that offers varying energy survey services for a growing UK client base.
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