You are probably aware that starting from 1 April 2018 you cannot provide a new tenancy, or a renewal tenancy, without holding a valid EPC (Energy Performance Certificate). This includes both residential and commercial properties and landlords that rent out properties without a valid EPC face prosecution.
This law does not apply to existing tenancies yet, but all landlords that have existing tenancies need to be aware that another deadline for EPC is looming on the horizon. It will apply to all tenancies in the private rented sector.
New EPC Law will apply to All Tenancies
The next deadline for EPC law will be 1 April 2020. This law will make it an offense to rent any property to an existing tenant if the landlord does not hold a valid EPC that has a minimum rating of “E”.
So now is the time for landlords to check all of the buy to let properties in their portfolio to ensure that they have an EPC with a minimum “E” rating and that the certificates will be valid beyond 1 April 2020. If landlords do not hold a valid certificate with the correct rating then they need to plan to obtain this straight away.
Any landlord that is caught without the required EPC and rating after the 1 April 2020 deadline will be subject to a fine of £4,000. This is per property and it will get very expensive if you have a number of properties that are not compliant. Breaking this new law could also have negative consequences when it comes to new mortgage applications as well.
What the new EPC Law could mean to you
Tenants that are aware of the new EPC law can use this as a stick to drive down the amount of rent that they pay. If the landlord does not make the necessary improvements to obtain an EPC then they could leave and rent elsewhere.
If any of your properties fail the EPC test then be prepared for some costly improvements. You will have no choice but to make these improvements as you will not be able to re-let your property without the necessary certificate.
Nobody is going to want to purchase a buy to let property that does not have a valid EPC with a minimum “E” rating either. If you have one or more properties that need improving then you need to face the fact and spend the money.
The Time for Action is Now
If you have properties that will require improvements to pass the EPC test then the time to act is now. Spread the cost out over the next few months before the law comes into force. Create an improvement plan for your properties and get started as soon as you can.
The sorts of improvements that you need to be prepared to invest in are the installation of double glazing, the insulation of walls and lofts, the replacement of boilers that are inefficient, the conversion of traditional light bulbs to LED lighting and the installation of new radiator valves.