UK regulations have laid out minimum Energy Performance Rating (EPC) ratings for rented property but with climate change a hot topic many homeowners now expect their new build property to meet a high EPC rating. Therefore, achieving a high EPC rating should be at the forefront of any developer’s mind when refurbishing, converting, and building property.
Current EPC regulations
In 2015, the UK government introduced Minimum Energy Efficiency Standards (MEES) for private rented properties in England and Wales. These laws stipulate that such properties must have a minimum Energy Performance Certificate (EPC) rating of E or higher. The MEES regulations came into effect on April 1, 2018 for new tenancies and on April 1, 2020 for existing tenancies. The goal of these laws is to improve the energy efficiency of rental properties and reduce carbon emissions.
Proposed EPC Regulations.
In 2020, the UK government started thinking about making some changes to how energy-efficient private rental properties in England and Wales must be. They wanted to hear what people thought about these changes and the deadline for giving your opinion was in January 2021. Right now, we don’t know the results because the government hasn’t shared that information yet.
The changes they were considering are:
Making sure all rental properties have at least a C rating on their energy efficiency score starting April 2025 for new rentals and April 2028 for current rentals.
Increasing the amount of money landlords can spend to improve a property’s energy efficiency from £3,500 to £10,000. The government believes this will help a lot of properties improve their EPC rating.
Focusing on improving the building’s structure first such as insulation, windows, and doors before other measures like new heating systems are installed.
Exemptions would mostly stay the same, but the proposals want to clarify the rules for special buildings like listed buildings and those in conservation areas and creating a central database to keep track of compliance and exemptions.
It’s important to keep in mind that these are just proposals and no regulations have been made yet. We’ll have to wait and see what the government decides to do based on the feedback they received during the consultation period.
Developing property with a high Energy Performance Rating.
Building a property with a high energy performance rating has several advantages.
First, it can significantly reduce energy costs. A property with a high energy performance rating is designed to be highly energy-efficient, which means that it uses less energy to heat, cool, and light the space. This can lead to significant savings on energy bills over time.
Second, a high energy performance rating can improve the comfort of the occupants. A property that is well insulated and has efficient heating and cooling systems will be more comfortable to live in, especially during extreme weather conditions.
Third, a high energy performance rating can help to protect the environment. Buildings are responsible for a significant portion of greenhouse gas emissions, and by building a property with a high energy performance rating, you can help to reduce these emissions and decrease the property’s carbon footprint.
Fourth, a high energy performance rating can increase the property’s market value. As more and more people become aware of the benefits of energy-efficient buildings, properties with a high energy performance rating are becoming more desirable and can command a higher price on the market.
Finally, building a property with a high energy performance rating can help to meet future regulations. The UK has announced EPC standards for property and by building to a high energy performance rating, you can ensure that the property meets these regulations and avoid costly retrofits for your buyers or penalties in the future.
In conclusion, building a property with a high energy performance rating can provide several advantages such as cost savings, improved comfort, environmental protection, increased market value and compliance with the building code regulations. It is an investment that will pay off in the long-term.
How to secure a lower interest rate on your property development finance by building to an A to C EPC rating.
In the UK, a property’s Energy Performance Certificate (EPC) rating can have a significant impact on the rates of interest that can be secured for both property development finance, as well as standard mortgages and buy-to-let mortgages.
Properties that have an EPC rating of A to C are highly energy efficient and can secure better rates of interest from lenders. This is because these properties are more likely to have lower energy costs, which can make them more attractive to lenders. In addition, these properties are less likely to require costly energy-saving improvements, which can make them more financially viable for lenders to lend on.
For property development finance, lenders may offer better rates of interest for properties with an EPC rating of A to C. Currently, some lenders offer a discount on both the rate and the arrangement fee for high EPC properties.
For standard mortgages and buy-to-let mortgages, lenders may also offer better rates of interest for properties with an EPC rating of A to C. This is all part of a drive to incentivise building energy-efficient homes.
It’s worth noting that lenders may have different policies and requirements for properties with an EPC rating of A to C. It’s important to shop around and compare rates from different lenders to find the best deal. You can also consider using a mortgage broker who can help you to find the best rates and terms for your property development finance, standard mortgages, or buy-to-let mortgages.
So as we have shown, a property with an EPC rating of A to C in the UK can secure better rates of interest for both property development finance as well as standard mortgages and buy-to-let mortgages. This is because these properties are more energy efficient, which can make them more financially viable for lenders to lend on. Building or acquiring a property with an EPC rating of A to C can be a smart investment, as it can lead to lower energy costs, increased rental income, and more attractive rates of interest from lenders.
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