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HomeMoneyGovernment lowers rental homes EPCs, hurting landlords and tenants.

Government lowers rental homes EPCs, hurting landlords and tenants.

  1. Government abandons strict EPC rules.
  2. Landlords relieved, tenants concerned.
  3. Mixed reactions to policy change.

In a surprising move, the government has abandoned its plans to impose strict EPC (Energy Performance Certificate) regulations on rental properties. Rishi Sunak, in a recent announcement, revealed that several green policies, including the minimum EPC standards for rental homes, would be “softened.”

For years, landlords had been anxious about the potential legislation that would have required them to upgrade their rental properties to achieve an EPC rating of C by 2028. The EPC system rates properties from A to G, with A being the most energy-efficient and G the least. Currently, all rental properties in England and Wales must have at least an E rating to be eligible for letting, unless they are exempt.

Government lowers rental homes epcs, hurting landlords and tenants.
Government lowers rental homes epcs, hurting landlords and tenants.

With the government’s u-turn, the existing EPC requirements are likely to remain unchanged for the foreseeable future. Sunak also cited concerns about the substantial costs of property upgrades, which would inevitably be passed on to tenants in the form of higher rents, as one of the reasons for scrapping the policy.

While the government will offer some financial assistance to landlords for property improvements, they will no longer face fines for failing to retrofit their properties.

The looming requirement of achieving an EPC rating of C had led some landlords to consider exiting the rental sector.

Ben Beadle, CEO of the National Residential Landlords Association, welcomed the decision as it provides much-needed clarity to landlords. He emphasized the damaging impact of policy uncertainty on the rental property supply and called for comprehensive plans that support energy efficiency improvements, including financial support and tax system reform.

However, not everyone supports this change in government policy. Dawid Baranowski from property technology firm IMMO highlighted the importance of EPC regulations in achieving sustainability and affordability in housing. He expressed disappointment that the government is reversing standards that have been in the public domain for years, with renters expected to bear the burden of higher energy bills.

Dan Wilson Craw, Deputy CEO of Generation Rent, criticized the government’s decision, emphasizing its negative impact on both the environment and renters’ well-being. He pointed out that many private renters already struggle with fuel poverty, and without stricter standards, they will continue to face unaffordable bills. Wilson Craw also urged for support for upgrading rental homes, stressing that landlords need incentives to make improvements.

The government’s decision to abandon proposed EPC regulations for rental homes has generated mixed reactions, with landlords welcoming the clarity but environmental and tenant advocacy groups expressing concerns about affordability and energy efficiency.

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