As we begin a new year, landlords in London, including Bermondsey, Rotherhithe and Canada Water, are abuzz regarding the Compulsory EPC Rating “band C” bill made its way into the recent news cycle. So, what is it, when does it take effect, and how should you plan for possible changes? We cover it here.
A Little History
The Compulsory EPC Rating law is a fairly new development in the field of energy efficiency. In general, the law gives tenants the right to request an EPC (energy performance certificate) for their rented property built after 2008. A landlord can either provide an EPC or allow the tenant to facilitate an EPC assessment. We wrote about it a couple of years back and can find more info here.
The EPC certification rates properties based on efficiency standards. Currently, properties built after 2008 need a rating of “E” or higher. If a property cannot meet the standards, the landlord must improve the property for better efficiency or get an exemption in same particular cases.
An example of EPC graph / report
The New Proposal
A bill proposal would change the rating from “E” to “C”. It states in part:
“The Secretary of State must amend the Energy Efficiency (Private Rented 15 Property) (England and Wales) Regulations 2015 (SI 2015/962) to require that, subject to subsection (2)—
(a) all new tenancies must have an energy efficiency performance of at least EPC Band C from 31 December 2025; and
(b) all existing tenancies must be at least EPC Band C from 31 December 20, 2028, where practical, cost-effective and affordable as defined under section 1(4).”
The Confusion and Concerns
It seems everyone is a little ahead of themselves as the proposal is just that. The bill hasn’t passed yet, and there is much to discuss. Rumor and commotion have some Bermondsey, Rotherhithe and Canada Water landlords believing the bill has already passed while others are completely unaware of the proposed change.
For those in the know, doubt and anxiety are high over modifications required to raise property ratings to a “C.” It’s also not clear if there are plans to make “band C” mandatory for older buildings if the bill passes.
The concern is that many London landlords are unaware of its impact on their financial statuses. On the one hand, they face the high cost of making improvements. On the other, they risk having vacant properties while the work is done. Another area of concern is how existing tenants will be affected by changes in rent prices. Either way, “band C” costs more money than “band E.”
How To Prepare
While the bill has not passed yet, it seems that a mandatory rating of “Band C” for all rented properties may happen in future years. For now, landlords should prepare by keeping an eye on updates to further legislation and any other changes. If you’re currently renting out your property, consider that prospective tenants are likely looking for energy-efficient properties with low energy bills in East London, which makes this information important when showing your rental unit.
You might want to start planning and making improvements a little at a time in between new tenants. If you need help deciding what improvements make sense, reach out, Alex & Matteo are your property experts and can help guide you in the right direction!