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Energy Performance Certificates
Landlords: How will the EPC affect
you?
From the 1st of October
2008, all rental properties in England
and Wales
will require an Energy Performance Certificate (EPC).
The EPC
originates from the European Union,
laid out in the Directive for the Energy
Performance of Buildings. 40% of the UK’s carbon emissions come from
buildings with 27% from domestic properties, so the Government are eager to
reduce this by making us all more aware of our energy usage. The EPC was first
implemented in the UK
within the Home Information Pack (HIP) for sale properties. Eventually all
buildings, sale or rent, domestic, commercial and public, will require an
Energy Performance Certificate.
So what exactly is an EPC? The main part of an EPC is an A-G Rating, similar to that found on
the back of a washing machine. The graph shows the Energy Efficiency and Environmental Impact of the property
represented by a number, 1-100, which falls into one of the seven bands. The higher the number, the more efficient
the property. The rating is based upon energy use per square metre of floor
area, fuel costs and CO2 emissions. Most properties in England and Wales rate somewhere in the 50s,
band D and E.
The
certificate also includes a summary of the properties features, for example the
heating type or loft insulation measurement, and rates them very poor to very
good. This allows you or the tenant to see at a glance which features are
lowering the rating.
In addition,
the completed certificate will recommend improvements to increase the property’s
efficiency. This may be increasing the depth of loft insulation or installing
low energy light bulbs, right up to replacing an old, inefficient boiler. The
recommendations are categorised, Lower
Cost Measures (£500 or less) and Higher Cost Measures (£500 +). The impact
and saving of each improvement is provided and the accumulative affect is shown
on the graph next to the properties original rating.
For those
really keen Energy Savers, there is also a Further
Measures section. These improvements are generally more expensive and have
a longer payback time in terms of energy saving. An example of this is
installation of photovoltaic solar panels on 25% of the roof area. This type of
recommendation should be seriously considered once all other improvements have
been made.
So when do you actually need to have
one? Well, the
legislation states certificates must be commissioned at the first new tenancy
after the 1st of October 2008. The law dictates the Landlord must be
able to provide prospective tenants with the EPC. However, The Energy Efficiency Partnership recommends you get one before
then, especially if you have a reasonably high turnover of tenants. You could
also benefit from discounted rates on certificates commissioned pre-October.
If you fail
to produce an EPC when required you could be fined £200 for non-compliance and you would still need to get one
done. It seems a good idea to get the EPC commissioned now, rather than waiting
till a tenant moves out, and the Certificate is valid for ten years. There is
no legal requirement to have the EPC re-commissioned within this timeframe;
however you may decide it’s worthwhile if you make substantial improvements
which have increased your rating.
The idea
behind the EPC for rental properties is that prospective tenants will be able
to compare properties by energy efficiency and estimated fuel bills. If you
have made energy saving improvements, your property will rate well. Energy
Efficiency is a hot topic and rising fuel bills mean higher rated properties
will be more attractive as tenants look for homes which are cheaper to run. It
may even be the case that tenants will pay a higher premium for energy efficient
properties.
Energy Performance Certificate: The
Facts.
· The
Energy Performance Certificate is required for rental properties at the first
new tenancy after 1st of October 2008. The EPC should be provided
for prospective tenants.
·
The
Certificate is a legal requirement and a fine of £200 is applicable for
non-compliance.
·
The
main component of an EPC is the A-G Rating of Energy Efficiency and
Environmental Impact (Carbon Emissions).
·
The
Certificate is valid for ten years and there is no legal requirement to have
the EPC re-commissioned within this period.
·
The
EPC must be carried out by a trained and accredited Domestic Energy Assessor
(DEA) or Home Inspector (HI).
The following flyers on Energy Performance Certificates and Landlords Energy Saving
Allowance may be useful
Landlord's guide to EPCs
Landlord's rebate guide
For information about EPC assessors...
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