Social Housing Speed Read – The impact of the scrapped EPC policy on the Social Housing Sector
6th October, 2023
Following the Prime Minister's speech to parliament on the 20th September 2023, the previous policy requiring landlords to meet minimum Energy Performance Certificate (EPC) ratings by 2025 has been abolished.
Background on EPC Ratings and the Minimum EPC Policy
EPC ratings are legally required in the UK and provide information on the energy performance of a building. They use an A to G rating scale which is based on the energy costs for running the property.
The government had introduced a policy that would require landlords to upgrade their properties to meet a minimum EPC rating of ‘C’ by 2025 for all new tenancies, and by 2028 for all current tenancies. The policy was aimed at making homes more energy efficient, which would help keep tenant’s energy bills low whilst reducing the carbon emissions of rented homes, helping the government strive towards their commitment to achieve NetZero by 2050.
According to the Government’s Energy White Paper entitled Powering Our NetZero Future published in 2020, the EPC ratings within social housing was as follows:
|EPC Rating||Percentage of social housing homes in the UK (2020)|
|A – B||2|
This meant that when the policies were introduced, approximately 44% of socially rented properties would need to take relevant action in order to increase their EPC Rating to ‘C’ or above.
According to the National Residential Landlords Association the approximate cost to upgrade a property to a ‘C’ grade rating is £7,646. This figure is likely to increase where older properties are concerned. As such, many landlords were concerned about their ability to afford such works, and there was a risk that some landlords would have to leave the rental market completely.
However, on 20th September 2023 PM Rishi Sunak axed the policy and instead asked people to take voluntary action to improve the EPC ratings of rented homes. Instead of the policy, the government have stated that there will be a 50% increase in grants to help families replace boilers to the amount of £7,500, putting the onus back on tenants to improve the energy efficiency rating of their homes.
The effect on the Social Housing Sector
Despite the scrapped proposals, the government are still encouraging a voluntary move towards improving EPC ratings, and encourage landlords and tenants to invest in making their homes more energy efficient where possible. Landlords and housing providers may want to consider this to futureproof their properties and avoid the problems caused by damp and cold properties.
The Energy & Climate Intelligence Unit has stated that the abolished policy could cost households almost 8 billion pounds in higher bills over the next decade, which may lead to tenants not properly heating the home. It may therefore be prudent to begin taking measures to improve energy efficiency, to help avoid intrusive damp and mould in the home.
Although the proposals requiring landlords to ensure their properties meet EPC ratings ‘C’ or above by 2025 have been scrapped, the government urge that voluntary measures are taken to attempt to continue towards this goal in order to improve the carbon efficiency of the country and keep bills down for renters during the cost of living crisis.
If you believe you are impacted by anything mentioned in the article above, or you have any concerns about a separate Social Housing matter, get in touch with our expert Social Housing lawyers.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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