Energy Performance Certificates
Energy Performance Certificates (EPCs) are a mandatory part of Home Information Packs (HIPs). They will also be introduced in to the residential lettings market from 1 October 2008.
Energy Performance Certificates for rental properties
If all goes according to plan it will be illegal to advertise a property to rent after 1 October 2008 unless it has an Energy Performance Certificate (EPC). If the property is tenanted on this date, there will be no need to have an EPC, but once the tenant gives notice to leave and the landlord wishes to remarket that property, then an EPC will be required before marketing can begin. An EPC will remain valid for 10 years.
The EPC will look a bit like the coloured bars that are on many domestic appliances. It will show two things, firstly the current energy efficiency of the property and secondly the potential allowing for reasonable changes.
There will be two charts produced, one will be the energy efficiency rating and the second will be the environmental impact rating. A very large building may get a great energy efficiency rating but still have a fairly large environmental impact. Each EPC will have a unique serial number. The legislation allows for a fine of £200 for failure to comply.
The big problem for the rental market is that to reduce energy consumption by making a property more energy efficient will be a cost to the landlord, and the gain will be to save costs for the tenant. There are grants in many areas for some properties to make improvements. Enquiries should be made of your local authority to find out what is available and whether you are eligible.
The idea behind the EPC is that a prospective buyer or tenant will be able to see the rating and make an informed choice about whether or not to rent that property based on its energy efficiency. This is a good idea, particularly as the rating will have some relationship to the cost of running the building, but it will be limited to the degree that people actually care less about that factor than others in the rental decision.
A tenant may well prefer a period thatched cottage over a brand new purpose built flat, regardless of the energy rating. Undoubtedly if two identical properties are offered for rent at the same rental value and one has a better EPC rating, then tenants may chose the better one. However, in many cases there will be other differences which might have greater influence.