Why is an EPC needed?
An EPC or Energy Performance Certificate is created to offer potential buyer and tenants with accurate information about a building’s energy efficiency as well as practical advise on how to improve that performance.
An EPC gives a building an energy efficiency rating in relation to the performance potential of the building itself, the build up and its services (such as heating, insulation ventilation and types of energy used). Because not all buildings are utilised in the same manner, the energy rating makes use of ‘standard occupancy’ assumptions that may vary from how the facility is used.
An EPC provides advice on how to enhance the building’s energy efficiency (to lower occupancy expenses) as well as a payback time. There is no legal duty to implement any of the suggested energy saving measures. However where the minimum EPC rating does not meet compliance (e.g. minimum E rating for a rental property in the UK) then the necessary improvements become obligatory if you intend to market for rent your property.
What is the importance of an EPC Rating?
Around 22% of the UK’s carbon emissions come from household energy use, hence energy efficiency is a priority. An EPC measures a property’s energy efficiency when issued. EPC ratings range from A (highest efficient) to E. (least efficient). Therefore primarily the rating on an EPC report starts outlining a visible scale to allow the consumer a visual understanding of a property’s standing in terms of consumption.
The percentages on show can also clarify the positioning on that scale and the capacity for improvement.
The EPC also offers information regarding a property’s energy use and typical energy expenses, as well as recommendations for reducing energy use and running costs. It provides monetary examples of how particular improvements can have a financial impact.
All properties are placed on a colour coded scale as well as given an actual percentage. Falling in between particular percentage points can determine a property’s rating.
An EPC rating is dependant on a number of factors such as, Per-square-meter energy us, CO2 emissions (in tonnes per year)
It provides a numerical grade from 1 to 100 or rarely 120 depending on renewable energy measurements and a alphabetical grade from A to G, with A being the highest
A= 92+ points
B= 81-91 Points
C= 69-80 points
D= 55-68 points
E= 39-54 points
F= 21-38 points
G= 1-20 points
In the last few years the EPC rating has taken a particular centre stage in the UK Rental Market in particular the Private Rented Sector. The introduction of Minimum Energy Efficiency Standards means that property owners are now unable to place inefficient properties rated below an E rating on the rental market. More information on this and its significance is detailed below.
For buyers, the rating is likely to have other implications in the near future with the introduction of Green Mortgages. Banks and mortgage lenders are likely to be given preferential terms or rates dependant of the rating. This is a European wide initiative and likely to be more implemented as the movement gains traction.
What information and access is needed during an EPC site inspection?
On the day of the inspection the assessor will require access to all elevations of the property, i.e. front, side and rear. Internally this would include access to all rooms, including lofts, basements, cupboards, gardens, corridors, staircases, landings and so on, in order for the assessor to measure.
The assessor would also need to record heating and lighting fixtures and appliances including boilers, hot water cylinders, electric heaters and all heating controls associated with these heating systems. The electricity metre would also need to be accessed. Where possible All doors and windows must be left open. Manufacturer’s manuals or product information may aid in verifying the age, make, model, band, and so on of the heating system and would ensure the report is compiled more accurately and quickly.
Where applicable letters of planning approval proving the age of any outbuildings, annexes, extensions, etc. should be available. In addition any building regulations completion certificates proving conversions will be helpful.
The accreditation body audits our assessors on a regular basis to guarantee the highest quality and accuracy of the reports. Fortunately, the site audits are performed remotely, with no further disruptions to our customers. However, during the inspection our assessors must take precise images of their findings. The photographs are securely saved after being submitted straight into the accreditation body’s software. Our appraisers take extra precautions to avoid photographing personal or sensitive information and use only photographs meant to give property information.
I have purchased a new build property, do I need an EPC?
If your property is newly built, then a separate energy performance certificate will be required which is called an On-Construction EPC certificate. On-Construction EPCs, also known as SAP EPCs are required before a new-build can be certified by Building Control. On Construction EPCs are produced off-plan using full SAP (standard assessment procedure) which is more accurate than RdSAP as used in existing dwellings because all the build specification is available to the assessor.
Any property built after April 1, 2008, must have an EPC certificate generated using full SAP procedures. This covers conversions, new build properties, and changes within a dwelling to create multiple units. A complete SAP EPC is valid for ten years and may be used for sale or rent in the same manner as the standard (RdSAP) version.
The key difference between a SAP EPC and other types of of EPC is that a in order to complete a SAP EPC a site visit is not required.
Minimum Energy Efficiency Standard of domestic private rented property: Guidance for landlords
Domestic Minimum Energy Efficiency Standard (MEES) Regulations define a minimum energy efficiency standard for private rented domestic dwellings. The Regulations apply to all domestic private rented homes that are legally required to obtain an Energy Performance Certificate and are let on particular types of tenancy agreements
Landlords cannot let or continue to let premises covered by the MEES Regulations that have an EPC rating of less than E after April 1, 2020, unless they have a legal exception in place.
When you want to let a home with an EPC rating of F or G, you must raise the rating to E or file an exemption before entering into a new tenancy.
If you are currently leasing a property with an EPC rating of F or G and have not yet taken action, you must immediately raise the rating to E or register for an exemption.
If you own a property that is presently vacant and you do not intend to rent it out, you do not need to take any action to enhance its rating until you decide to rent it out again but please bare in mind that the legislation is set to change again in 2025 where the minimum standard is set to increase from E to C.
Depending on the type of property you own the necessary modifications required to increase the EPC rating can vary from low cost to much more significant and this is likely to be at the higher end of the scale when the legislation eventually changes to a minimum of C requirement. Our experienced advisors however are at hand to guide you through the requirements. Call or email us today to make a no obligation enquiry.
How is the energy rating of my property calculated?
The energy rating of a building is a complex calculation depending on a number of criteria, including:
- the type of building (flat, house, or bungalow) and whether it is detached or not
- the amount of usable rooms (excluding kitchens, bathrooms, hallways, staircases, and landings),
- general extensions or loft extensions and their construction type
- the size of the structure and the number of floors
- the type and quantity of glazing (i.e. single or double glazing)
- the building material (e.g. brick, stone, timber frame, etc.)
- wall insulation roof construction (flat, pitched) and insulation
- the number of chimneys and open flues
- heating systems and fuel types
The energy rating is adjusted for the floor area of a building such that it is independent of size for a certain type of building. The rating is computed on the basis of standard occupancy to guarantee that the findings are consistent for similar building types and relate to the physical fabric of the structure rather than the individual occupant’s energy usage patterns, which can vary significantly between homes.
The rating is unaffected by the number of people in your household, the amount of domestic equipment you own (such as washing machines and refrigerators) and how efficient they are, or how you choose to heat your home (i.e. individual temperature settings and how long it is heated during the day or night). This enables prospective purchasers or tenants to compare the energy ratings of buildings on a like-for-like basis.
How will I know what measures will make an improvement on my energy rating?
Your EPC assessment will give a set of suggestions outlining how to enhance your property’s energy efficiency. It will provide a brief list of the most important activities you can take, as well as a more extensive list farther down that includes all recommended procedures. The recommendations will assist you in determining which measure or combination of actions to implement.
How can I increase my EPC rating to E on a low budget and make it compliant for renting?
There are three different ways for a landlord to carry out the required adjustments to improve the EPC rating and get an E rating in order to lawfully rent the property at a low or no cost.
The simplest way (if financially feasible) is to finance the changes yourself. The Cost Cap is a significant consideration. There is a statutory requirement that you spend no more than £3500 including VAT on energy efficiency measures. If you are unable to upgrade your home to an EPC rating of E for £3,500 or less, you should make all conceivable changes up to that amount and then seek an ’all improvements made’ exemption.
The second option would be to seek third-party finance. You may avoid spending your own money if you can get third-party financing to cover the whole cost of remodelling your property to EPC rating E. Because the cost limit does not apply, you should utilise all available funding to get your property up to band E, or higher if possible. Funding sources include the Energy Company Obligation (ECO), Green Deal financing, and local government subsidies.
The third option is to employ a combination of your own and third-party funding. If you are able to get third-party financing, but it is less than £3,500 and inadequate to update your property to a “E” EPC rating, you may need to supplement with your own funds up to the cost cap.
For more information on saving opportunities for landlords check out this guide from Simple Energy Advice.
Which one of the recommended energy measures should I implement?
The EPC assessment for your home will provide a list of recommendations for improving your property’s energy efficiency. It will give a summary of the most significant activities you may engage in, as well as a more detailed list that contains all suggested processes. The suggestions will help you decide which measure or combination of measures to undertake.
The following is an example of a list of actions extracted from an EPC report that might improve your home’s energy efficiency. The performance ratings that follow the improvements mentioned below are cumulative, implying that the upgrades were implemented in the sequence given in the table.
How is the EPC report produced?
The government-approved software tool assesses the energy performance of the building and generates the EPC and suggestions using data and standard performance tables. The data is also used to generate a 20-digit non-sequential reference number by the software.
The energy efficiency of buildings is evaluated using the Standard Assessment Procedure (SAP). During the construction process, SAP is used to demonstrate that a new building satisfies energy efficiency targets. In most cases, new structures have a wealth of information easily available for calculation, such as complete floor plans and specifications. Most new buildings constructed in accordance with current Building Regulations will receive a C or B rating. If new structures are expressly promoted as ecologically friendly, they should be near the top of the B band, if not in the A band. When a building is built, the EPC must always be based on all of the relevant facts.
Much of the information needed to analyse the energy performance of existing buildings is not easily available, thus a survey is required to obtain it. To reduce the homeowner’s inconvenience, the technique for assessing energy performance was modified to include a set of assumptions about the structure based on norms and standards at the time the building was built. This means that the homeowner must provide less information for the evaluation than a new built property. This modified procedure is known as the Reduced Data Standard Assessment Procedure (RdSAP).
In general, RdSAP is the appropriate technique of evaluation for buildings that are being sold for sale or rent. However, for certain types of buildings, the SAP technique will provide a more accurate assessment. Buildings constructed to current Building Regulations standards, or those refurbished with advanced energy efficiency features implemented, are examples of properties where the SAP approach may provide a more accurate assessment. When using the SAP approach on an existing building, more detailed and extensive information will be required. When using the SAP approach on older structures, the energy assessor must confirm that any recommendations made are suitable for placement in the building.
Who is an Energy Assessor and do they need qualifications to issue and EPC?
An energy assessment of a building, as well as the creation of an Energy Performance Certificate (EPC), may only be carried out by an accredited energy assessor. The EPC for a newly built building can only be generated by an accredited domestic energy assessor who is qualified to work on construction projects only.
Accreditation schemes are in charge of overseeing energy assessors and making sure that their assessors are qualified and have the right skills to do an energy assessment on a building. Energy assessors will need to have the right qualifications for the type of building they are looking at.
Qualified Energy Assessors can issue EPCs. They are required to take the necessary training in order to achieve this qualification following which they are required register with an accreditation scheme in order to register EPCs.
An EPC assessment is non-invasive, the assessor solely analyses visible and accessible items. Local knowledge and construction types let experienced assessors deduce much needed information.
Assessing a property’s insulation profile requires access to basements and lofts. After the survey, the information is submitted online and a copy of the registered EPC is logged on the EPC Register.
Assessors of energy use may work independently, as employees of service organisations such as surveyors or energy businesses, or as workers of the landlord or owner of the property being evaluated. Energy assessors are required to be members of an accreditation programme that has been approved by the government.
When conducting an assessment, energy assessors are required to do so in an independent way and to disclose any potential conflicts of interest that may arise. There may be a conflict of interest if the energy assessor has employment relations with an organisation or is linked to the person who commissioned the energy performance certificate (EPC), however this is not an exhaustive list of potential conflicts of interest.
Energy assessors are obligated to recognise any conflicts of interest and report their concerns to the accrediting programme they belong to if they believe they have been instructed to carry out procedures that are in direct opposition to this standard.
What information is contained within an EPC report?
- Energy Efficiency rating of the property
- A reference value (benchmark)
- Factors affecting a property’s Energy Performance
- Environmental Impact of the property’s Energy Consumption
- Relevant information about the property i.e. reference number address etc.
- Suggestions for Improving the property’s Energy Performance Rating.
- Estimated energy use of the property and potential savings that can be made
- Issued date, details of the assessor and details of the accreditation body
Do I need an EPC to rent my property and how long is it valid for?
Main points:
- An EPC is valid for ten years and may be used as many times as necessary during that time.
- If there is no valid EPC for a property, the regulations require it to be instructed before it is placed on the market.
- Before promoting a building for sale or rent, a person working on behalf of the seller or landlord (such as an estate agent or property manager) must be satisfied that an EPC for that property has been commissioned.
- An EPC must be created by an accredited energy assessor who belongs to a government-approved accreditation scheme.
- All commercial media advertising and property listings must explicitly reflect the building’s energy rating.
- The requirements demand that an EPC be provided free of charge to the individual who becomes the building’s buyer or renter.
- An EPC indicates a building’s energy efficiency grade on an A-G scale.
- The EPC contains ideas for increasing energy efficiency by implementing the necessary improvements.
- The EPC may also contain information indicating which of the suggestions, if implemented, would be eligible for financing under the Green Deal.
What exclusions apply on the need for an EPC?
In most cases, an EPC is not necessary if the seller or landlord can establish that the building is any of the following:
Buildings that are protected as part of a designated environment or because of their special architectural or historical merit are exempt from the need for an energy performance certificate to the extent that compliance with minimum energy performance requirements would alter their character or appearance unacceptably.
Temporary structures that will be used for no more than two years.
Residential structures that are planned to be utilised for fewer than four months of the year or where the owner or landlord may reasonably anticipate the building’s energy usage to be less than 25% of total year round use.
Self-contained structures having a total useable floor space of less than 50m2 (i.e. buildings entirely detached from any other building).
A structure is also excluded if its is suitable for demolition and if the seller or landlord can show that all appropriate planning approvals, listed building consents, and conservation area consents exist in regard to the demolition of the property, and either outline planning or planning permission exists in relation to the redevelopment, and where relevant listed building consents exist.
An EPC may not be required for holiday rentals. An EPC will be required only for a property rented out as a furnished holiday rental, as defined by HMRC, where the building is occupied for the purposes of a holiday as a result of a short term letting arrangement of less than 31 days to each tenant, and is rented out for a combined total of 4 months or more in any 12 month period, and the occupier is responsible for meeting the property’s energy costs.
An EPC is not needed when renting out a single room since it is not a building or a building unit intended or renovated for independent use. If the building is sold or rented out, an EPC will be required.
This is not a conclusive or exhaustive list and specialist advice should be sought to clarify exclusions on specific cases.
Do I Need an EPC before I market my property?
If a building does not already have a valid EPC, the seller or landlord must commission one before putting it on the market. Before the building is placed on the market, a person working on behalf of the seller or landlord (for example, the estate agent or property manager) must be satisfied that an EPC has been commissioned.
The seller or landlord, or someone acting on their behalf, must make every reasonable attempt to get the EPC within 7 days. If the EPC cannot be acquired within 7 days after exercising all reasonable measures, a further 21-day period is permitted.
An estate or leasing agency may sometimes offer a copy of the EPC to a potential buyer or renter. However, it is the seller’s or landlord’s obligation to ensure that a valid EPC is provided free of charge to the person who eventually becomes the buyer or seller.
The energy performance indicator of the property, as displayed on the EPC, must be disclosed in any listing. Failure to do so may result in a £200 penalty per ad.
When should an EPC be made available for a property that is sold or rented?
An energy performance certificate (EPC) is required to be made accessible by the seller or landlord of an existing building at the earliest opportunity possible and no later than the time when a person requests information about the building and at the time at which the seller or landlord first makes available any information in writing about the building. This also applies when a new request is made to view the building and the time at which the person views the building. The seller or landlord is required to provide a valid EPC at no cost to the individual who ultimately becomes the buyer or tenant of the building.