Landlords face higher EPC bills as Labour's reforms kick in

Telegraph

9 hours ago

Landlords could be forced to fork out hundreds more for energy performance certificates (EPCs) from Sunday as new rules come into force, experts have warned.
Under reforms, energy assessors will be expected to use a new data collection system, raising the price of certificates to up to £250 each.
The more stringent criteria could also mean that properties could drop an EPC band, experts said, making them impossible to let under rules set out by Ed Miliband, the Energy Secretary.
Under the new methodology, assessors will be required to inspect the size, frame type and glazing of every window in the house more thoroughly, as well as recording any extractor fans and blocked chimneys.
Chris Norris, of the National Residential Landlords Association (NRLA) property body, warned that the price of an EPC certificate, which typically costs between £50 and £120, could rise by £20 this summer as a result of the changes.
He said: 'It's reasonable to assume that it will take assessors longer to take more precise measurements and input more specific data, so price rises are inevitable.'
However, Sean Horton, of mortgage adviser Respect Mortgages, said the more intensive assessments could increase the price of certificates 'to £150-£250 easily'.
He added: 'The window measurements alone are crackers. Instead of just noting 'typical double glazing,' assessors now need to measure each window individually, record orientations, frame types, glazing gaps, ages, draught proofing – the lot.
'That's going to make each assessment much longer, with the cost passed on to the landlord.'
From 2030, all rental homes must have an EPC score of at least C, while landlords accepting new tenants will be expected to achieve the required standard by 2028.
The plans are championed by Mr Miliband, who said it was a 'Tory scandal' that Britain's poorest households were living in 'cold, draughty homes', adding that 'many rent from private landlords, below decent standards'.
But Anna Moore, of retrofit company, Domna, warned that the new system would likely result in many homes dropping an EPC band.
She said: 'In particular, the model changes how electric heating systems are scored, intended to solve the problem of people installing heat pumps and then seeing their EPC go down.
'The new model also lowers the 'default assumptions' on carbon emissions in traditionally heated homes, so many properties will see their EPC drop.
'For example, a 1960s 90m² home, with empty cavity walls, might drop five points from EPC D to EPC E.'
Labour is due to replace the beleaguered EPC system entirely with the much-anticipated Home Energy Model, following years of consultation.
Among other changes, the reforms are expected to favour homes with the 'capacity to integrate with smart technology', which some fear will penalise homeowners who refuse a smart meter.
Mr Norris, of the NRLA, said: 'When the Home Energy Model launches, the increases could be significantly more, depending on the outcome of the expected consultation into their methodology.
'While it is difficult to predict, it would not be unreasonable to expect that prices could double.'
Kundan Bhaduri, of the Kushman Group real estate firm, said: 'For portfolio landlords, this is death by a thousand clipboard checks.
'Costs will rise sharply, and worse still, homes that previously scraped a C rating could now drop to a D, dragging us into yet another regulatory penalty zone. And this is just the warm-up act before the even more chaotic Home Energy Model arrives.'
Many landlords are expected to sell up ahead of the changes, while others will be forced to spend thousands of pounds insulating properties or installing heat pumps to meet the required grade.
Labour has floated a spending cap of £15,000 per property, and on Wednesday, Chancellor Rachel Reeves confirmed £13.2bn worth of funding for insulation upgrades.
However, there are fears the cost of green improvements will ultimately be passed on to tenants in the form of higher rents. Research by Swedish bank, Handelsbanken, revealed 92pc of UK-based landlords believe tenants would pay more for greener homes.
Tom Darling, of campaign group Generation Rent, urged the Government to impose rent caps on landlords who accept grants for eco upgrades.
He said: 'With so many renters in fuel poverty, it's vital the Government is trying to make homes easier and cheaper to heat through higher energy efficiency standards.
'However, these plans must take place alongside amendments to the Renters' Rights Bill to protect renters from eviction and rent rises where public money has been used to improve a property. These grants aren't there for landlords to turn a dime off of.'
A government spokesman said: 'Everyone deserves to live in a warm, comfortable home. We're investing £13.2bn in the Warm Homes Plan to upgrade five million homes over this Parliament, cutting energy bills for good through new insulation, solar panels and heat pumps.
'These long-planned changes make EPC assessments more thorough, giving people a clearer picture of how energy efficient their home is.'