The Future of Property Looks Green

Three letters are all over your social media feeds, your inbox and the trade publications you read right now: EPC. Energy Performance Certificates have been required for any building being sold, let or constructed since 2007, and measure how energy efficient a building is on a scale from A to G. Scoring a building takes into account a wide variety of factors including insulation, windows, and heating systems.

The increase in conversation around EPCs can be attributed to a few key factors. From 2018, landlords needed to ensure their properties were at least an E rating for new tenancies. Last year the government has announced that in 2025, that will increase to a minimum C rating for new tenancies, expanding to all tenancies in 2028. The penalty for a property not having a valid EPC will also increase substantially, from the current £5,000 to £30,000 in 2025.

That means anyone currently renting out property, or buying and building property to let, needs to start planning ahead now. There have been some gloomy reports of landlords deciding to sell off their portfolio rather than bring them up to the necessary standard, but much of the industry recognises this as an opportunity. More energy-efficient homes are cheaper to live in and run and will increase tenant satisfaction, potentially delivering better returns for longer.

The cost of upgrading houses is a serious consideration though, and one that we’re beginning to see solutions to. Several specialist lenders are now offering green Buy to let loans that factor in EPC grades – a more energy-efficient home can net the borrower a better deal. I think over the next 12 months we’ll see more and more green deals both from the High Street and alternative providers, enabling developers to create future-proof portfolios of property that are 2025 ready.

If you’re concerned about how the changing EPC rules could affect your plans, get in touch today and one of our advisors can discuss future growth plans and your current situation.