BM Rural Outlook E-FINAL Spreads - Flipbook - Page 41
38 | Rural Outlook Issue 21
Sales & Lettings | 39
One of the simplest ways to improve the
rating of a property is to add loft insulation,
which adds 10 to 12 points for 270mm
thickness and 16 points for 400mm. 12
points would be enough to take a midrange F property into the E band.
Turning a challenge
into an opportunity
Meeting new energy efficiency standards for rental
properties is not just about helping tackle climate
change but is also an opportunity to win new
tenants and increase rental incomes.
While improving the energy performance
of homes is now enshrined in legislation –
something that may become increasingly
demanding as time goes on – it also
makes sense from a commercial point of
view, with research clearly showing that
it reduces rent arrears and voids, increases
the market value of the property and makes
it more appealing to potential tenants.
Those positive aspects of what might
otherwise be seen as just another hoop
through which landlords need to jump
reflect changing attitudes amongst
tenants in general and younger people
– who are more likely to be looking for
rental homes – in particular.
While 10 years ago most people
searching for a home would have given
little more than a passing glance to a
property’s EPC (Energy Performance
Certificate) rating, they are now
much more likely to consider it when
And while that may be because they have
a deep concern for the environment and
the impact of carbon dioxide emissions
on climate change, it also reflects the
steadily increasing cost of energy and the
effect of a poor efficiency rating not just
on the planet but on their pocket.
EPCs give a property an energy efficiency
rating from A (most efficient) to G (least
efficient) and were introduced in 2007.
They allow home owners facing rising
fuel costs to compare the relative costs
of different homes – and increasingly
they are choosing wisely.
The figures are persuasive. Improving a
home from a G grade to an E grade would
save a tenant £1,500 per annum, while
taking that same home up to a C grade
would save an impressive £2,450.
Rising sea levels, flooding, disease and
climate-related disasters prompted the
Government to introduce the Climate
Change Act, which aims to achieve
zero emissions by 2050 and reach a 68
per cent reduction by 2030. The global
temperature has risen by one per cent
since 1850 and is expected to keep rising
without urgent action.
Since 2018, landlords have not been able
to agree new tenancies for properties
with an EPC of E or below, while existing
tenancies were brought into that category
last year. The proposal is that from 2025
all properties let under new tenancies will
need to be rated C and above. Three years
later, existing tenancies will be included
in that category, which means all rented
property will have to be rated C or higher.
It is landlords, of course, who have to
foot the bill for the improvements, but
they don’t need to be costly and the
initial, smaller, changes can make a big
difference. It’s worth remembering that
a tenant who is saving hundreds or even
thousands of pounds in energy costs
is likely to be prepared to pay more in
rent – and is less likely to default. When
times get tight, rent tends to be the
first payment that gets dropped, and
an energy-efficient home makes that
scenario less likely.
Improving a home from
a G grade to an E grade
would save a tenant
£1,500 per annum, while
taking that same home up
to a C grade would save an
The legislation around energy efficiency
is a direct response to a climate change
crisis that has seen the past five years
record the hottest temperatures ever
seen on the planet.
It may sound like a tall order, but if the
upside is better and longer tenancies,
easier to let properties, fewer voids and
arrears cases and increasing asset value,
it’s a challenge landlords have to grasp.
Insulating the hot water tank adds 8
points, while draught proofing only
adds 1 or 2. Adding a 16-panel solar PV
system, which has additional benefits,
adds 10 points to the EPC score.
It is important to understand that the
critical factor in considering a building’s
EPC rating is insulation – keeping the
existing warmth inside the building. While
changing electric heating to LPG heating,
for instance, will reduce the overall cost
of heating the home, the relatively similar
unit cost for both fuel types means it
won’t impact on the EPC rating.
Similarly, while an air source heat pump
is worth 40 points, the Government
recommends that this should only be
fitted to homes that already have a C
rating so that it is insulated enough for
it to be effective. It is improvements
such as cavity wall insulation and better
glazing that make a difference, although,
perhaps surprisingly, double glazing only
adds 3 points.
The advice from Batcheller Monkhouse
is two-fold: do the easy things first and
take expert advice about the best way to
improve the energy efficiency of rental
stock in order to protect your investment,
maximise your returns and turn what
might otherwise be a cost into a benefit.
It is also important to take action now.
Under the existing legislation, a landlord
who can show he or she has spent
£3,500 attempting to improve the energy
efficiency of the building can apply for
an exemption if they still fall short of the
minimum rating. From 2025 they will have
to spend £10,000 before applying for an
exemption and will have to show they
have carried out improvements in the right
order – starting with the most expensive.
Clare Sheffield MARLA
Loft insulations is one of the simplest ways to improve your property’s rating