Within weeks the government is to publish a key report that will reveal how the government aims to meet its energy efficiency targets for commercial and residential properties. Included in the report will be details of a reform of the EPC system, a minimum EPC rating for residential lettings and the replacement of gas boilers with heat pumps and hydrogen fuelled boilers.
Currently a residential letting must have an EPC rating of E or better but the government is proposing is that by 2025 for new tenancies and by 2028 for existing tenancies the property must achieve a minimum EPC rating of C or better. If the government keeps to these targets, it is estimated that over three million properties will require energy efficiency improvements. Various organisations put the average cost of the improvements at £7,000 to £10,000 per house. Currently there are exemptions and further information is keenly awaited on how exemptions will work under any new regulations.
The EPC system itself has been criticised as being unreliable and inaccurate giving widely varying results. Included in the report will be details of a reform of the system.
The report will address the government’s long term goal of decarbonising all homes by 2050. This will involve the replacement of gas boilers with heat pumps or boilers fuelled with hydrogen. After available subsidies the current cost of installing a heat pump is quoted to be between £7,000 and £8,000. The government is currently consulting on the case for new natural gas boilers to be easily convertible to hydrogen use and be ‘hydrogen-ready’ by 2026.
The concerns of landlords about future energy efficiency legislation is shown in the results of a survey of 750 landlords completed by The Mortgage Works. Half of the landlords think the new regulations will be difficult to achieve and a third of the landlords are not confident they can achieve the minimum EPC requirement. The landlords highlight not only the major investment that is required but also their lack of knowledge about energy efficiency improvements.
Daniel Clinton, head of The Mortgage Works, says: “Given the concerns and challenges facing landlords in not only making the necessary improvements, but financing them, it’s perhaps no surprise that more than a third of landlords are not confident they will be able to bring their properties up to the required EPC C standard.”