New EPC Rules: A Positive Shift for Landlords with Listed Buildings

Introduction to the EPC Challenge

The property market has been fraught with challenges for landlords in recent years, with Energy Performance Certificate (EPC) regulations being among the most concerning. Many property owners have been facing the daunting prospect of having to upgrade their properties to EPC level C by 2030, with interim deadlines approaching even sooner. This requirement has been one of several factors contributing to landlords exiting the market, alongside taxation changes, rising interest rates, and concerns about the Renters’ Rights Bill. However, recent developments have brought welcome news, particularly for owners of listed buildings. Let’s explore what these changes mean and how they might affect your property investments.

Understanding the Current EPC Requirements

Under the proposed regulations, all rental properties would need to achieve an EPC rating of C by 2030. More urgently, properties would need to meet this standard by 2028 before being relet following a change of tenancy. This accelerated timeline has caused significant concern, as it gives landlords just over two years to make potentially substantial improvements. The financial implications are staggering. Initially, landlords were expected to spend up to £10,000 on energy efficiency improvements if their properties couldn’t reach a C rating otherwise. However, recent discussions have indicated this figure could rise to £15,000—a 50% increase before the legislation has even been enacted. With the total cost to the sector estimated at £36 billion, it’s no wonder that landlords are concerned about the viability of their investments.

The Game-Changer: Listed Buildings Exemption

The most significant development—and a genuine win for many landlords—is the proposed exemption for listed buildings. This recognition from the government addresses the practical realities that many owners of historic properties have been highlighting: it’s often physically impossible to bring these buildings up to modern energy efficiency standards without compromising their historical integrity. Listed buildings frequently face restrictions that prevent modifications such as:

• Installing solar panels
• Replacing original windows
• Adding external wall insulation
• Modifying limited space rooms to accommodate internal insulation

This exemption provides immediate relief for a segment of landlords who would otherwise face impossible choices between legal compliance and preservation of heritage properties.

Available Financial Support Through Grants

While the exemption for listed buildings is significant, many landlords will still need to improve their properties’ energy efficiency. Fortunately, there are substantial grants available that could help offset these costs. Landlords can access grants of up to £30,000 for energy efficiency improvements if:

• Their tenants earn less than £36,000 annually
• Their property is in an eligible postcode

These grants can cover various improvements, including:

• Solar panel installation
• Ground source heat pumps
• Various insulation measures

Unlike loans, these grants don’t require repayment, making them an excellent option for landlords looking to improve their properties’ energy efficiency without bearing the full financial burden themselves.

Looking to the Future

There are several reasons for cautious optimism about the EPC situation:

1. Potential expansion of exemptions: The listed building exemption may eventually extend to other property types that face similar practical challenges.
2. Extension of deadlines: As the government recognizes the scale of the challenge, the 2030 deadline may be pushed back to allow more time for compliance.
3. Political changes: With the volatile nature of UK politics, a change in government before 2030 could lead to further revisions or even abandonment of these requirements.
4. Increased grant availability: We may see these grants extended to cover more postcodes, making financial support accessible to more landlords.

Next Steps for Landlords

Despite these positive developments, landlords should still be proactive about energy efficiency:

1. Check for grant eligibility: Investigate whether your properties qualify for energy efficiency grants based on your tenants’ income and postcode.
2. Document building constraints: If you own properties that might qualify for exemptions, gather evidence of the specific challenges that prevent compliance.
3. Plan for gradual improvements: Even with potential exemptions or deadline extensions, improving energy efficiency remains beneficial for tenants and can enhance property value.
4. Stay informed: Continue to monitor developments in this area, as regulations and support mechanisms are likely to evolve.

Conclusion

The exemption for listed buildings represents a significant win for landlords who own historic properties. It demonstrates that the government is beginning to listen to practical concerns about the implementation of EPC regulations. While challenges remain for many landlords, this development, combined with the availability of substantial grants, offers some relief in an otherwise challenging regulatory landscape. By staying informed and taking advantage of available support, landlords can navigate these changes more effectively while maintaining the viability of their property investments.

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Rizwan Moledina

Riz is the founder of homes2let and has been in real estate for over twenty years. He has a background in economics and is a real estate developer and buy to let investor.

You can get in touch with Riz via riz@homes-2let.com.