A new report by property technology firm Spec suggests that as many as 2.5 million Energy Performance Certificates (EPCs) in the UK are wrong due to inaccurate measurement standards and practices, putting many landlords at risk of inadvertently breaking the law.

Since April 2018, rules have been in place across England and Wales, setting out minimum energy efficiency standards (MEES).

These regulations made it unlawful for landlords to grant a new lease for properties that have an energy performance certificate (EPC) rating below E, from 1 April 2018, unless the property is registered as an exemption.

It is estimated that, in total, between 9 and 15% of the rental stock in the UK does not meet these new standards. Older properties may struggle more than new build in this regards, particularly if they have non-standard construction or they have not been well maintained or up-graded over the years with improvements to energy efficiency.

Properties that do not meet the minimum energy efficiency requirements cannot be advertised for rent, meaning landlords are left with a void.

There is an example of this on the Property 118 landlord forum where a couple are likely having to sell their investment property because of this issue.

The only way to increase the energy efficiency of such properties is to upgrade them and there is obviously a cost associated with this.

The current/existing EPC will identify ways to improve the energy rating of the property but you can also arrange for an Energy Assessor to visit your property and make recommendations.

What measures can landlord take?

The improvements that could save you the most energy depend on your property, but typical examples include:

  • insulation, eg solid wall, cavity wall
  • Loft insulation (minimum 270mm)
  • heating/new boiler
  • draught-proofing
  • double glazing
  • renewable energy generation, eg solar panels or heat pumps.
  • putting radiators/heaters in previously unheated areas
  • Energy efficient lighting

Landlords can also do simple inexpensive things, like changing lightbulbs and downlighters for LEDs.

As the property does not meet minimum energy efficiency standards, that makes it un-mortgageable, so, even if the landlord has equity in it, they will be unable to re-finance the property to release that equity to make improvements.

This puts the landlord between a rock and a hard place - they cannot let the property out to generate an income, and it is un-mortgageable, so they cannot release equity to pay for improvements, and, as it is un-mortgageable, they will also struggle to sell such a property as well.

The market for un-mortgageable properties is much smaller than the market of people who are buying using bank finance, because the former can only be purchased for cash.

Additionally, a property with a sub-standard energy efficiency rating will not be worth as much as a property that does achieve the standards.

This is for the reasons given above and because a low energy rating property costs significantly more to run in terms of utility bills. Indeed, many landlords find that they have a high tenant turnover because of this, making properties on the cusp less and less popular with landlords/investors.

Sell your rented property to a cash buyer

However, there is another option if you wish to sell a low energy rating property, and that is to sell it to a professional cash buyer like ourselves.

We operate in England and Wales and will buy any property in any condition - tenanted or vacant - without you having to serve notice on tenants or worry about upgrading the property.

We are a family-run business who pride ourselves on our fair and friendly service.

All you need to do is contact us for a no-obligation cash offer, and we will provide you with one within 48 hours.

We offer less than the market value for the property for the reasons give above, but the sale is guaranteed, there are no estate agencies commissions, no viewings, and of course cash in the bank - guaranteed - on the day of your choosing. Furthermore, we pay your legal costs and there are no fees payable, whatsoever.

Our professional house buying service is becoming increasingly popular with landlords with problem properties and/or tenants so you have nothing to lose by getting in touch.

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