What is an EPC?
If you’ve been involved in buying, selling or letting a property since 2008, then you will have come across Energy Performance Certificates, or EPCs. EPCs indicate how energy efficient a property is with a rating value from A (very efficient and the best you could hope for in a modern well insulated property) to G (the least efficient and typical of an old draughty building!). As a benchmark, the average property rating in England and Wales is a D. An EPC will also show the environmental impact of a property as well as providing a breakdown of the efficiency of specific areas within the building. The report will also provide recommendations on how to improve efficiency, reduce your fuel bills and cut carbon emissions.
An EPC certificate is valid for 10 years and can be reused as many times as needed within that period. If you want to see if your property has ever had an EPC you can search the EPC National Register here.
Can I carry out my own EPC?
No. An EPC has to be carried out by a domestic energy assessor. The inspection takes approximately 1-2 hours and depending on the size of your property, and where it is, it is likely to cost in between £40 – £100. Accredited assessors can be found on the National Register.
Do I need an EPC to rent out my holiday home?
Yes and no! Unfortunately there is no black and white answer to this question. You need an EPC if you let your property out as a Furnished Holiday Let for short term rentals of less than 31 days per let for a combined total of at least 4 months in a single year.
However, there is a significant exclusion. The Government’s guide to energy performing certificates goes on to say that an EPC is only required for holiday lets if the occupier (i.e. the guest) is responsible for paying the energy bills for the property. Most holiday home owners will be responsible for paying the energy bills, therefore excluding them from requiring an EPC. However, it is also possible to argue that the occupier, or guest, indirectly pays the energy costs of the property as part of their payment for the holiday. At the time of publication (January 2020), the Ministry of Housing said that they were not able to provide an interpretation of the law. Instead they advised holiday home owners to contact their Local Trading Standard Office who are responsible for enforcing the Regulations to clarify if they need an EPC or not.
Is my holiday home exempt if it is a listed building?
Again, there is no clear cut answer to this question. There is no specific exemption for listed buildings having an EPC. However, the Energy Performance of Buildings (England and Wales) Regulations 2012 states that an EPC is not required for ‘buildings officially protected as part of a designated environment or because of their special architectural or historical merit, in so far as compliance with certain minimum energy performance requirements would unacceptably alter their character or appearance’. So for example, if you are likely to be required to make changes such as installing double glazing or external wall insulation which would ‘unacceptably alter the character or appearance’ of a protected building, an EPC may not be required.
It is up to each owner to reach their own conclusion on whether minimum energy efficiency requirements would have an unacceptable impact on the historic character of a listed building. If you are unsure we recommend that you seek independent specialist advice from your local authority conservation officer.
What are MEES and do they apply to holiday rentals?
As part of the Governments wider effort to reduce carbon emissions and energy costs for tenants the Minimum Energy Efficiency Standards (or MEES) came into effect on 1 April 2018. The MEES made it unlawful for landlords in England and Wales to grant new leases to tenants if the property has an EPC of either an F or G. From 1 April 2020 it is unlawful for landlords to continue to let a property that has an EPC rating of either an F or G. Again, the question of whether MEES apply to holiday lets or not is a grey area.
The Department for Business, Energy and Industrial Strategy’s guidance on MEES states that the regulations only apply to properties that are legally required to have an EPC. Therefore, if you have ascertained that your energy costs are paid for by yourself and not the holidaymaker, then you are not required to have an EPC rating of an E or better. However, if after speaking to your Local Trading Standard Office you believe that you are required to have an EPC then you need to ensure that your rating is at least an E.
What about holiday lets in Scotland?
The laws surrounding EPCs in Scotland are slightly different to those mentioned above which are only relevant for England and Wales. The legislation surrounding landlords and EPCs in Scotland include holiday lets. All holiday homes, including listed buildings, are required to have an EPC. In addition, all commercial adverts for your holiday home must clearly show your EPC rating. This can be as simple as including for example, EPC = D, on your advert. It does not need to include the whole certificate. Unlike privately rented properties in Scotland, there is currently no minimum EPC rating for holiday lets.
As a holiday home owner in Scotland it is your responsibility to ensure your holiday home has an EPC. If you are not sure if your property already has an EPC you can check the Scottish EPC Register. Bed and breakfast accommodation, caravan holiday homes and certain holiday parks do not need an EPC.
Whilst you might initially think that having an EPC rating for your holiday home is an unnecessary administrative task, perhaps it is worth thinking about the positive benefits of having an EPC rather than focusing on whether you legally need one or not. An EPC report is likely to provide you with ideas of how you can make your property more energy efficient and hopefully lower your energy bills. Not only could this save you money, but if you can demonstrate that your accommodation is environmentally friendly – as well as warm and cosy! – you can use this as a useful marketing tool as eco properties are increasing in popularity. Also, whilst many holiday lets in England and Wales might not currently require an EPC, and those in Scotland do not require a minimum rating, it is possible that in the future these laws will change to reflect the increasing need for us all to become more environmentally aware.
It is always best to strive to achieve ‘best practice’ and look for proactive ways to improve your holiday home. Not only are you less likely to be caught out by any up-coming changes in the law, but you are more likely to provide a safe and comfortable holiday home which in turn should result in warm and happy guests!