What the New EPC C Energy Efficiency Target Means

As part of an aim to reduce carbon emissions from buildings, achieve net carbon zero and improve the energy efficiency of homes, there is currently a proposal to reduce the minimum EPC rating for rental properties. This could move from E to C possibly as soon as 2025. Previously the aim was for these new energy efficiency targets to apply from 2030. This change is being considered as part of the Minimum Energy Performance of Buildings Bill which is currently being considered by parliament.

The proposals would mean that for all new tenancies started after the end of December 2025 a property will need to have a minimum EPC rating of C. They also mean that all existing tenancies would need a minimum EPC rating of C from December 2028

Currently EPC mniimum is an E

As from the 1st April 2018 there is a requirement for any properties rented out in the private rented sector to normally have a minimum energy performance rating of E on an Energy Performance Certificate (EPC). The regulations came into force for new lets and renewals of tenancies with effect from 1st April 2018 and for all existing tenancies on 1st April 2020.

It is unlawful to rent a property which breaches the requirement for a minimum E rating, unless there is an applicable exemption. A civil penalty of up to £4,000 will be imposed for breaches. This guidance summarizes the regulations. There are separate regulations effective from 1st April 2016 under which a tenant can apply for consent to carry out energy efficiency improvements in privately rented properties.

For most landlords this will mean that they will no longer be able to rent out a property with a rating of F or G after April 1st 2018. As such landlords with properties in this EPC bracket should begin preparing now for April 1st. However, there are several nuances and exceptions, which this guide covers in detail.

Continuing tenancies

From 1st April 2020 the Minimum Energy Efficiency requirement will apply to continuing tenancies where there is a valid current EPC for the property, and an EPC is legally required to be in place. The property must therefore be brought up to the minimum E rating before 1st April 2020 to comply with the Regulations, unless an exemption is available and is claimed by being registered in the Public Exemptions Register. This applies to the following ongoing tenancies:

Assured tenancies, including a shorthold

Ongoing Rent Act protected tenancies. In practice, however, this means that it will only apply where the property which is let (or where it is part of a building) then the building (as a whole) has been legally required to have an EPC which is most likely to occur if it has been sold

Assured agricultural occupancy or similar tenancies relating to agricultural dwellings

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