Landlord’s EPC deadline: Does anyone else feel conned?

Landlord’s EPC deadline: Does anyone else feel conned?

10:54 AM, 28th July 2023, About 10 months ago 48

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Have you invested thousands of pounds to upgrade your rental property to meet the proposed EPC rating of C? Or have you decided it’s too expensive to do the work and sold up? Then this week’s news from Michael Gove probably made you very angry. I know I was. In the words of the great Johnny Rotten: “Ever get the feeling you’ve been cheated?”

It’s not just the number of idiots who keep pushing the non-existent deadline of 2025 to meet a minimum EPC rating of C for new tenancies, and 2028 for all tenancies – THERE IS NO DEADLINE! – it’s the fact that many of us girded our loins and started preparing for what we expected was to come.

Now Property118 reports that Gove is saying we should slow down the move to a deadline because too much is being asked of landlords and the predicted cost of improvements. What?

In recent years, the UK government has pushed forward with its environmental agenda, with the Energy Performance Certificate (EPC) rating being one of the cornerstones of its efforts to reduce carbon emissions.

Despite the fact this proposal was only aimed at the private rented sector and not social housing and residential homes, most landlords knew deep down that we would be targeted with fines if we didn’t comply. So, many of us did.

Upgrade their properties’ EPC rating

There will be lots of landlords who will have spent considerable sums of money to upgrade their properties’ EPC rating or, in some cases, sold their properties altogether to avoid the never-agreed-but-everyone-thinks-there-is-one deadline. Now, with the government contemplating a rethink on when this should happen, landlords who are out of pocket will be left questioning the fairness and reliability of the whole process.

For me though, the biggest tragedy is for those landlords who had old homes and sold up, probably with a decent tenant family, because they knew it was an impossible task to improve the EPC rating. A family forced to move on, for what? A landlord who gave up an asset on a poorly thought-out wheeze.

I don’t doubt addressing climate change and reducing energy consumption is essential. As responsible citizens, landlords, like everyone else, should contribute to these noble goals. Nevertheless, it is crucial to address the issues arising from the government’s flip-flopping stance on the EPC deadline.

The 2028 deadline was an ambition

When it was first mooted, landlords came under immense pressure to upgrade their properties. This was not helped by various PRS organisations and even lenders who hadn’t quite twigged that the 2025 then 2028 deadline was an ambition and not a law.

This has created lots of confusion in the sector and led to many landlords investing significant amounts of time and money to improve the energy efficiency of their properties, only to now be told that the ‘deadline’ might be reconsidered. This inconsistency showcases a lack of commitment on the government’s part and raises doubts about the seriousness of their climate change policies.

Also, the cost burden of improving the EPC rating falls solely on the shoulders of landlords. These expenses can be substantial, especially for small-scale landlords who own one or a few properties. Selling up then made financial sense even though that leaves fewer homes to rent.

EPC ratings have been criticised for their accuracy

My other big issue is that the EPC ratings themselves have been criticised for their accuracy and effectiveness. Just read some of the forum answers on Property118 which highlight many landlords’ experiences that the EPC rating system is flawed and inconsistent – which leaves most of us with a lack of faith in the validity of the entire process. And the criteria for future EPC ratings might be changing! You couldn’t make it up.

If the government is serious about driving real change, they should work on developing a more robust, reliable and transparent system to accurately assess a property’s energy performance. And that’s for ALL properties and not just those owned by landlords.

We can’t be the only ones responsible for fighting climate change while other property owners escape the same level of scrutiny.

Forking out thousands of pounds on EPC improvements

So, if you feel disappointed at forking out thousands of pounds on EPC improvements, or you have sold up or feel saddened that decent tenants had been forced to find somewhere else to live, then join the club.

I keep on saying the same thing: We need to organise properly as landlords to make a stand that the government and tenant organisations will be afraid of. Without PRS landlords delivering decent homes for rent, where will private renters live?

The EPC debacle is just one issue we should unite and fight against, but we probably won’t which means life as a landlord will continue being the depressing and soul-destroying occupation it has become.

Conned? Not quite the word I would use but then I’m not allowed to use a word that rhymes with ‘cooked’.

Until next time,

The Landlord Crusader


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Comments

John Dace

10:58 AM, 29th July 2023, About 10 months ago

I personally saw this unfolding from the start.
As soon as Gov concocted the whole stupid epc thing I knew where we were headed - a right royal F***Up. You cannot pigeon hole every uk building on a points based laptop system. There are too many variables with inevitable wide inaccuracies. As soon as you use that system to legislate - you run into serious injustices and people will revolt. Thats without the serious question of why the PRS is singled out.
Ask yourself - how much CO2 has been emmitted due to EPCs - an army of people all driving around, having attended courses in hotels (driving there) and the offices and infrastructure of the governing bodies and assessor trainers. Then how much CO2 has been emitted by the landlords and builders and manufacturers producing stuff we drive to collect and drive to install. Then how much Co2 emitted by all the grant companies in their offices and vans and the Gov offices full of staff administering it all. Wouldn’t it have been so much better to just create intelligent incentives to improve things across all types of buildings (not just the PRS). We all know of crazy things happening due to EPCs -Ineffectual works which tenants say have made things worse - perfectly good boilers and heaters being scrapped well before their end of life. A total misunderstanding of a users lifestyle and energy usage with things like south / north facing ignored. I know of EPCs where the calculated ‘savings’ per year are more than the actual tenants bill! And best not get me started on commercial EPC e.g. a single one small room shop with door open all day when shop open, and 1 small fan heater behind counter requires new underfloor and wall insulation!!
This whole EPC thing has turned out (very predictably) to be a monumental cock up and in the usual fashion of this Gov - end up counter intuitive to its intended aims.

Ade T

15:51 PM, 29th July 2023, About 10 months ago

I have done nothing with my existing stock of 22 houses other than Led lights, loft insulation and more efficient boilers and heating controls only when the current boiler reaches its normal end of life. I have however brought additional properties that I have bought recently up to a C rating during refurbishment. As long as I scrape a C i'm happy; I should say WAS happy to invest this money.
In my last one, an early 19th Century grade 2 listed building, those works had to include internal insulation of the outside walls. Impossible with a tenant in situ.
BUT........
THE problem is now this.
Forget the timescale for LL to get to EPC "C", thats out of the window for now with Gove partial U turn.
Forget the current EPC system as well now, because that has to be out of the window too. It is not an EPC anyway its a ECC (energy cost certificate). The EPC was never about energy PERFORMANCE in its current format. It was always only about the COST of heating a home for an "average" owner or tenant.
That is why the current EPC system is 100% doomed to failure in its current guise, and always was; and that is why you should do nothing right now to try to get to a C. Todays C could be literally ANYTHING in the new, yet to be revealed, EPC system that Gove announced.
Take two identical 3 bed houses, one with a 28kw output gas boiler. The other identical house with a 28KW output electric boiler. Both boilers use 28KW of energy per hour.
The house with a gas boiler has an EPC rating of 69, which is only just a "C" rating. This is actually one of my own houses. The EPC says i will use 11,500 kwh of power to heat the home and water. The gas fired combi currently costs 7.51p per kwh (current price cap for gas). That's £863.65 to run the gas combi for heating and water.
Then we look at the same house with the electric combi. The house needs the same heat and hot water so consumes the same amount in kwh of electricity that the previous house consumes in gas, i.e 11,500 kwh. Aside from the boiler, everything else is identical. Unfortunately whilst the CO2 output relating to electricity generation is a fraction of the CO2 output of gas, the current price capped cost of 1 kwh of electricity is 30.11p. So my identical house as the gas heated house costs the tenant £3,562.65 to heat the house and hot water using electricity.
£863 for the gas heated house, £3,562 for the electric heated house 4 times the price. The Energy PERFORMANCE of these two houses is identical, BUT, My current EPC C gas fired house plummits to an EPC G rating with the new electric boiler. Same energy performance; very different Energy Performance Certificates.
More importantly for landlords the policy means millions of properties in the PRS will be banned from being rented if gas is ditched in the current EPC system.
The problem is that now the current EPC system is proven to be unfit for purpose and conflicts directly with other Government initiatives to reduce gas usasge; the EPC system will be re-written to be more carbon focused. (as confirmed by Gove last week).
And there we are, right back to the beginning of my post. I've got some of my recent property acquisitions up to an EPC rating of C, and the EPC system that got me to the C is going to be disregarded in another 6, 12, 18 months in preference to a NEW EPC system that you can bet your life will dump my recently achieved C rating to a D or E. Hence why on earth did i bother achieving the C in the first place? Its a joke.
More importantly if the new EPC system prioritises electric heating appliances & ditching gas boilers then the tenants had better get used to paying at least 4 times the cost to heat their homes. My two identical houses referred to above are already very well insulated. As long as electricity costs 4 x the price of gas, the impact of forcing us to use low carbon electricity will massively increase the cost of running the home. I suspect the new EPC system will require massive investment in heat pumps and/or solar panels, and that is going to dwarf the current investment the PRS is being expected to stump up. Imagin having just spent £10k on a property now to achieve and EPC C , only for the new EPC (yet to be revealed) scoring system to knock you back to an F or G, and to be able to rent your house out you need to spend yet another £15k to qualify for a C under that new system., by installing heat pumps and solar.
I'm based in the hilly north of England and I know several people who have had air source heat pumps installed. The cost of running them far outstripped the cost of running a gas boiler. They have since removed them.
I won't be spending 1 penny trying to get to a C again until the new EPC system is fully revealed and the new legislation is brought in, setting in stone what the PRS must do and when.
In the meantime the uncertainty will make more landlords sell and more tenants will see rising rents and a decimated supply of rental property.
All overseen by our current Housing Minister Mr Gove.
One would think that if the end goal was to decimate the PRS sector then the Government would have put something in place to support the 11 million people living in the 4.5 million homes in the private rented sector first.

Contango

16:10 PM, 29th July 2023, About 10 months ago

What a mess. We too have in the last few years upgraded almost every homes' boiler to modern high efficiency condensing ones. There is a legal concept called Estoppel which may possibly have relevance. If us in the Privately rented secoter have relied to date on guidance to follow one particular course of action and invested accodingly the principle is we cant or shouldn't be penalised for having done should the Government U turn to favour electric heating. I wonder if the Government might U turn on this if they were to realise just how much investment there has been on condensing boilers which have been touted strongly by EPCs for the last ten years or so as the way to boost enerfy efficiency and to achieve the required grade.

Mick Roberts

16:34 PM, 29th July 2023, About 10 months ago

Reply to the comment left by Ian Sam at 29/07/2023 - 09:34
I've said same. These contractors set up. Send us no paperwork. I've started to get photo's now before & midway, but like u say, the next EPC man not interested.

Mick Roberts

16:34 PM, 29th July 2023, About 10 months ago

Reply to the comment left by Ade T at 29/07/2023 - 15:51
Wow, great figures. We need u telling these MP's what's what.

Aah so here's me telling my tenants we may need Heat Pumps & they will be better, but they gonna' cost the tenants much more to run are they? We don't know what day it is.

Mick Roberts

16:35 PM, 29th July 2023, About 10 months ago

Reply to the comment left by Trevor Leigh at 29/07/2023 - 16:10
Yes, only last year Feb-April 2022, I had 46 boilers fitted free for me by the grants. By the Govt. By the PM.

Ade T

18:20 PM, 29th July 2023, About 10 months ago

Reply to the comment left by Mick Roberts at 29/07/2023 - 16:34
The efficiency of air source heat pumps varies significantly with air temperature.
Therefore the efficiency varies significantly with location and altitude.
Living on the top of a hill in the Pennines at 1000 feet above sea level is not good for them.
When they cannot extract sufficient warmth from the air, their backup is to the heat water/CH with electricity from the grid, costly electricity.
An ASHP will be far more efficient Surrey than the top of the Pennines.
One of my friends had an ASHP installed and got a grant for over half the cost. The terms of the grant were that if the ASHP was removed within 5 years then the grant had to be repaid in full. Its performance was so bad that he had it taken out and a gas boiler fitted 5 years and 1 day after installation of the ASHP.
Beware, its grim up north!

Robin Pearce

11:36 AM, 30th July 2023, About 10 months ago

Reply to the comment left by John Dace at 29/07/2023 - 10:58
Because the government's aim is net zero by 2035. But EPC software doesn't even take into account electrically heated properties are lower carbon footprint than gas because around 45% of electricity is now generated from renewable sources.

So at present in many cases gas heated flats have a higher carbon footprint than electrically heated yet have a better EPC rating because the EPC software is geared up to running costs, not carbon footprint.

So there'll be massive upheaval based on wrongly programmed software !

Rennie

18:58 PM, 6th August 2023, About 9 months ago

Reply to the comment left by John Mac at 28/07/2023 - 11:16
Exactly so! Climate change is a scam, the same as Global Warming, Covid, electric cars, green energy and many other government scams. The outcome they want is to tax you on the carbon. Yes foks, another exciting tax coming your way. And if you fall for the central bank digital currency you are truly screwed!

GlanACC

11:27 AM, 7th August 2023, About 9 months ago

Reply to the comment left by Rennie at 06/08/2023 - 18:58
Central Bank digital currency (if it comes about) is a good idea. Unlike crypto currencies it is backed by a central bank and may cut down on those dodgy cash in hand transactions. Everything is traceable, and thats not a bad idea. Sooner it comes the better

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