Due to the government's Domestic Minimum Energy Efficiency Standard (MEES) laws, landlords who rent out a property with an EPC rating of F or G run the risk of incurring civil fines of up to £5,000 for each infraction.
There are some circumstances where an exemption may apply, including:
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- If a sitting tenant refuses to give consent for improvement works to be carried out
- If carrying out the necessary works would devalue the property by more than 5%.
In addition, the requirement to comply only extends to ‘appropriate, permissible and cost-effective’ improvements. For example it would adversely affect the property’s value or potentially cause issues with the fabric of the building, although you will need independent verification of this. You can find more information about this on the Residential Landlords Association website.
Better EPC ratings can mean lower utility bills for your tenants, so they are more likely to be able to afford your rent – or future increases. As such, whether your property falls into that 10% or not, here are five improvements you can make that should help raise your rating. The average is ‘D’ but you can of course work towards a higher rating.
1. Exclude draughts
Go around the property, checking for unwanted gaps where air can escape:
A. Under doors – you can fit a simple brush strip at the bottom of the door for just a few pounds.
B. Around windows – if you can afford to install double glazing, that is by far the best option, which should also increase the value of your property. If that’s not within your budget, there are options for foam, but worth seeking professional advice.
C. Via the letterbox opening – fit a plate to stop cold air coming in, again, these cost very little.
D. Keyholes – fit metal discs that cover the keyhole and slide easily to the side when you put the key in.
E. Fireplaces – if the fireplace is not used, you can fit a chimney draught excluder yourself or have a professional cap the chimney pot.
The caveat is to remember that all properties need ventilation to allow some air to circulate, particularly in rooms where moisture is produced, such as bathrooms and kitchens, so don’t seal these windows. Instead, you can put seals on the internal doors to prevent warm air escaping from the rest of the house via these rooms.
2. Insulate the top of the property
Much of a building’s heating can be easily lost if the roof space is not properly insulated to the recommended thickness of 270mm, so check yours and increase it if necessary. The cost of loft insulation materials is £35 per m2 while the average price of labour for the installation averages to around £250 per day, according to Checkatrade1.
Although, you can significantly reduce this by buying and fitting the insulation yourself, but it can take a lot of time if you're not experienced. If your loft is used as living space, you will need to insulate the pitched roof itself, which is not as easy to do, so it’s advisable to employ a professional fitter.
3. Insulate the walls
Along with the roof, this is where most of the property’s heat can escape if there is no cavity wall insulation, which is injected from outside into the space between the inner and outer brickwork. Cavity wall insulation generally costs around £22-£26 per m2 (polyurethane foam), whereas glass wool cavity insulation costs around £13-£18 per m2, according to Checkatrade.2
If the property has solid walls, take professional advice, as the cost of insulating will run to thousands of pounds – possibly more than £10,000 for larger houses and they may not advise to do it in the first place in which case you would be exempt.
4. Upgrade the boiler
If your boiler is an older model, it could be operating at a low efficiency or less, meaning it takes much more energy to heat the property than a new boiler, which should operate at around 90%. Speak to a plumber who is experienced at fitting boilers in rented properties and they will be able to advise you on the most appropriate one for the number of tenants – this is particularly important if your buy to let is an HMO (House in Multiple Occupation), especially if you are paying the bills.
5. Install low-energy lighting
Installing low-energy LED or CFL lighting is a quick and easy way to make a saving on electricity bills. And technology has come a long way in recent years, so there’s no need to worry about rooms being too dim for your tenants.
If your buy to let doesn’t comply with the EPC regulations, the consequences could be quite severe. Your local authority can impose a civil penalty of up to £4,000 and, if the property still isn’t up to standard after three months, you can be fined up to 20% of the rateable value. On top of that, you could lose a significant amount of rental income for the period of time that your property is legally unlettable.
Do bear in mind that not only is the minimum rating a legal requirement, but tenants are also placing an increasingly high value on the ‘green credentials’ of a property. Since January 2008, they have been able to see the EPC when they view a property and many will choose to rent one that has lower heating bills than another, particularly the over-25s, who have more experience of paying utility bills and having to manage their living costs. So, it’s well worth investing in making your property as energy efficient as possible, particularly if you are in an area with a lot of competition.
Important information
There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.
Your property may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.
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