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As of the 1st October, all properties (including private, Registered Social Landlords and Local Authority) will require an Energy
Performance Certificate (EPC) before they can be rented.
The Housing Act 2004 and the Energy Performance of Buildings Directive (EPDB) give a legal requirement for all property owners
to provide an EPC to new tenants. Penalties for failing to provide an EPC have not yet been fully decided, but there may be
financial consequences for those landlords who do not comply.
There has been some limited marketing around these changes, but there is still widespread confusion around many of the
issues. One of the major problems is that the Government still hasn't finished writing a lot of the legislation, and so they can't
market what hasn't yet been set in stone!
The most important elements that are still to be decided are:
An Energy Performance Certificate currently included in a Home Information Pack (HIP) is valid for 1 year. The Government has
indicated that rental EPCs may be current for up to 10 years, but has not yet confirmed this.
Should the Government rule that an EPC be considered current for less than 1 year, landlords may find themselves having to pay
for virtually identical EPCs upon every subsequent contract renewal.
The Government is yet to provide a final proposal on whether 'cloned' properties (i.e properties built to exactly the same
specifications and with the same interior components) can be covered by an EPC done on a sample of similar properties.
There is still confusion on the level of property checking and data required for the cloning purpose to work.
What is clear is that good and up to date information of all properties is required to give an accurate EPC assessment. This needs
to include details such as levels of roof insulation, boiler type, cavity wall insulation, age of building, number of rooms, extensions
etc.
Local authorities face the same problems as EPC providers, such as a lack of concrete information from the Government lea.
However, as they are landlords on a large scale, issues such as sufficient staffing will become the real problem.
Some local authorities and Registered Social Landlords will already have working knowledge, through taking part in the
Government pilot last September. This was a very small scale pilot, and the impact of the legislation is yet to be fully appreciated.
Should the legislation require all properties to provide an EPC at renewal of contract, and should the Government confirm that
they are to last 10 years, there will be a huge surge of demand for EPCs within the first 12-18 months, and very reduced activity
thereafter. This could put significant short term pressure on local authorities, both financially and logistically. With the legislation
due to come in in less than 4 months, local authorities must either act now or contract an outside EPC Provider.
EPCs can only be completed by accredited Domestic Energy Assessors (DEAs). To train and qualify as a DEA, takes on average 16
weeks and approximately £2500. This timescale includes significant amounts of 'on site' work and experience. The process can
take longer should the DEA have no previous relevant experience.
However local authorities decide to provide their EPCs, they will still have to put in place extensive training programmes for their
staff. Even if they decide to outsource and hire external Domestic Energy Assessors, local authorities will still have to educate any
staff dealing with EPCs in what can be a complex set of legislations.
Should local authorities decide to train their own Domestic Energy Assessors, they must consider both how they will fund the
initial financial outlay for training, and the implications of limited internal opportunities for these staff after the initial surge of EPC
work is completed.
It is widely believed the Government will soon start to use the EPC rating as a way of rating property schemes as eligible for
grants. Properties that do not hit minimum standards may become ineligible to rent.
Working within the Social Housing sector will also bring with it a number of other challenges in terms of difficult tenants and
those with special needs. An EPC can only be completed after access to a property, and ERS has found that the tenant will often
require written notice before accepting an appointment. Some tenants also demand a password identification system, and the
provider needs to be sophisticated enough to handle this requirement.
Energy prices are spiralling at the moment. As the squeeze on oil resources continues, this will only worsen, leading to increased
'fuel poverty'. Put in its simplest context, a good EPC rating means that a property will ensure lower energy bills, and will be
cheaper to run. This will be increasingly attractive for tenants hit by rising energy bills.
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