New Minimum EPC Deadline | Mortgage Savers

There’s a new minimum EPC deadline. The long-awaited Minimum Energy Efficiency Standard for buy-to-let (BTL) properties is one step closer to becoming law.

With the second reading of the Minimum Energy Performance of Buildings Bill introduced in parliament on April 24th, 2023, landlords and property investors should start preparing for the upcoming changes.

In this blog, I’ll explore the key takeaways from the updated Bill and discuss the potential implications for various stakeholders.

New minimum EPC Deadline for Buy-to-Let Properties

The updated Bill now requires all privately rented properties to have at least an EPC Band C rating by December 31st, 2028, where it is practical, cost-effective, and affordable. The definition of these terms is still up to the Secretary of State. Although there is no specific limit on how much landlords need to spend before qualifying for an exemption, it is widely assumed that the threshold will increase from £3,500 to £10,000.

New minimum EPC Deadline for Homeowners

By 2033, homeowners must ensure their properties achieve at least an EPC Band C rating. Exemptions include cases where permission is explicitly refused, it is not technically feasible, or the cost of improvements exceeds £20,000. It remains to be seen whether this £20,000 exemption limit will also apply to private rented sector properties.

New EPC Deadline for Mortgage Lenders

Mortgage lenders must ensure their domestic portfolios have an average energy performance level of at least EPC Band C by December 31st, 2030. This may lead to more stringent criteria for properties with lower EPC ratings, making mortgages more challenging and costly for owners of less energy-efficient properties.

New minimum EPC Requirements for Social Housing Landlords

Social housing landlords must ensure a significant number of their residential properties reach at least EPC Band C by 2030. The definition of “significant amount” is yet to be determined by the Secretary of State.

New EPC Requirements for Commercial Buildings

The Bill currently requires rented non-domestic buildings to achieve an EPC Band B rating by 2030, with exemptions for cases where improvements are not technically feasible or cost-effective. Commercial owner-occupiers are not included in these new requirements.

What do you need to do next?

While the Minimum Energy Performance of Buildings Bill is not yet law, it is essential for property investors and landlords to start planning for the necessary improvements. With the potential for increased exemption thresholds and stricter mortgage lending criteria, it is crucial to stay informed and adapt to the changing landscape.

Keep an eye on further updates and make sure you’re prepared to meet the new EPC requirements when they come into effect.

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