A total of 15% – or 2.5 million – energy performance certificates (EPCs) for properties in the UK are “incorrectly rated”, with landlords “illegally letting” hundreds of thousands of homes
That’s according to new research, which warns around half of EPCs are “so inaccurate” that the properties would need to be re-graded and therefore a “significant number” of properties are below the legal standard (Grade E) for rent.
An EPC provides ratings to indicate the energy performance and environmental impact of a property at the time of assessment and what it could achieve if suggested improvement works were carried out.
EPCs are lodged on the national register and valid for 10 years, after which it must be renewed – more than 17 million have so far been registered to date.
The research from property technology solution Spec claims landlords are letting properties illegally as an estimated 35,000 E rated properties – worth nearly £8 billion – are below the legal standard for the residential lettings market.
It found this was due to EPC scores that would likely be downgraded if the floor space was accurately measured.
It reveals one in four EPCs recorded the size of a property so inaccurately that it varies by more than 10% from the actual measurement.
Floor space is a key component of the calculation carried out by Domestic Energy Assessors (DEAs) to give a property its energy rating.
Accurate floor space measurements are essential for producing an accurate final EPC rating because as little as a 1% change in property area can result in a one point change in EPC score, which in turn can alter the overall EPC rating.
The report suggests this is particularly important for residential landlords who must ensure their property achieves an A to E rating to ensure it can be legally let or face thousands of pounds worth of fines.
Anthony Browne, Senior Advisor to Spec said: “Our study reveals that it’s not really a case of it your EPC is measured inaccurately. Inaccurate EPCs present serious challenges and risks not only to property professionals, consumers and estate agents – but also the environment. It means tens of thousands of landlords are unwittingly renting out their properties, opening them up to the risk of fines of thousands of pounds through no fault of their own.
“Measuring the energy efficiency of buildings accurately is essential in limiting their environmental impact and tackling the bigger global issue of climate change. If you are not measuring the problem properly, you won’t tackle it effectively.”
Renting properties from April 2020
From 1st April 2020, all domestic properties that are being let must have an E rating or higher, regardless of tenancy status.
If a residential property is found to be below standard, fines of up to £5,000 could be levied for every three months the property remains below standard and landlords may also incur a “name and shame” public penalty notice.
Tenants cannot be evicted during this time on the grounds of failed EPC, neither can it be rented out again until the standard has been met.