The government has initiated a formal consultation on stricter Energy Performance Certificates (EPCs), which could spell trouble for landlords.

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Currently, an EPC is valid for 10 years and only needs renewal if a rental property changes tenants. However, the government proposes shorter durations to better reflect changes in energy efficiency over time.

The consultation says: “There may be an information benefit for prospective Private Rental Sector tenants and policymakers for more current EPCs, and landlords may be able to capture upgrades to their properties more easily, in turn potentially improving desirability in the market and aiding compliance with regulations such as Minimum Energy Efficiency Standards.”

And of course it adds: “However, landlords may also incur a very small increase in costs from more regular EPCs.”

The government is proposing that a new Energy Performance Certificate (EPC) be required at the end of each tenancy, even if the same tenant renews or extends their lease.

Currently, EPC regulations require a certificate to be obtained before a property is marketed for sale or rent, with a maximum allowance of 28 days post-marketing to produce the certificate, in order to prevent the absence of an EPC from delaying a sale or letting.

The government now proposes that the regulations be amended to require an EPC before a building can be marketed for sale or rent, and says: “This will ensure that buyers and renters have information available to them at the point of making a purchasing decision whilst making the requirements clearer and easier to enforce.”

The government is also recommending the scope of EPCs to be extended requiring a valid certificate for the entire HMO when a single room is rented out. Currently, the guidance states that an EPC is only necessary when the entire house is rented.

The consultation proposes: “Mandating EPCs for HMOs when a single room is rented out will ensure that HMOs will need to comply with the requirements set out in the MEES Regulations if they did not have a valid EPC before this point. This would provide consistency across the private rented sector. As a result, we are proposing a 24-month transitional period for any HMO landlords newly brought into the scope of the regulations to obtain a valid EPC. This would also ensure reasonable time to comply with MEES requirements if these were applicable.”

It continues: “As HMOs are disproportionately occupied by vulnerable people, we anticipate that these measures will help ensure that tenants are living in thermally comfortable properties, with reduced costs during a time of high fuel poverty.”

Regarding short-lets, the consultation says: “The current guidance states that an EPC is only required for properties rented out as a furnished holiday let, as defined by HMRC, where the building is occupied for the purposes of a holiday as a result of a short term letting arrangement of less than 31 days to each tenant, and is rented out for a combined total of four months or more in any 12 month period, and if the occupier is responsible for meeting the energy costs for the property.