Two-thirds of landlords doubtful about purchase of non-EPC compliant properties

The findings are not surprising. It is also an option for sellers to invest in getting a property up to C to make it attractive to landlords as well as homeowners. The boundary between EPC categories is unfortunately variable in my experience, so even a property bought as a C can be assessed as a D next time around, without any changes to the property. For that reason, I now only purchase properties with a B rating.

Reply to the comment left by AnthonyG at 10/02/2023 - 15:46This is obviously going to present problems to people wishing to sell properties which struggle to get a D, never mind a C. I have 2 properties, built in the late 1800s, both rented out to long term tenants who are more than happy with their places, but what happens in 2028? With the intended laws coming into place, how will I give them notice to leave, when intended legislation will virtually prohibit this?
As the rental received for each is only £475 pcm, it will not be financially viable to spend £10K on each property, especially as I'm retired, and would never see that money back in my lifetime. I suspect that this will give rise to informal agreements for many people, especially if the place cant be sold either.

We were offered up to 15 free EPC's via a building society through which we have a mortgege. So we had one done on the family pile.

We had spent lockdown carrying out a significant insulation project on all outside walls. Existing boiler and loft insulation already pretty good and everything is properly double glazed.

The result = C74

The only way to improve apparently is to put in solar panels and solar thermal.

The result would be C79 for cost of £3.5k-£5.5k.

So I compared our result with the neighbours' using

https://find-energy-certificate.service.gov.uk

and I find a neighbour who has done nothing is ...

C72 with the potential to be B84.

Same design of house near as makes any difference!

Looking at the 9 almost identical houses I find most are currently D and of these 4 able to achieve 'B'.

Our EPC states that it is not possible to get a 'B'.

The categorisation of 'Average', 'Good' 'Poor' of 'Very poor' against the feature (wall, roof, window etc) is quite inconsistent. When I have time I will put it all in a spreadsheet to confirm my suspicion that the assessor can give a good or bad score depending on their point of view.

As measureable and quantifiable as the EPC is supposed to be, subjectivity seems to have a significant ability to cause a LL pain.

I therefore conclude a couple of things.

1. If I were an assessor, I would review prior art so as not to stick my neck out. Maybe adjust according significant verifyable major changes. If this does happen then a street will have a max EPC regardless of your improvements. Though the wildly varying results for my street suggests assessors do not look at the neighbours results before announcing yours to the world.

2. Review your neighbours' results and choose the most generous assessor. Ensure that you are armed with the neighbours' results so that they a obliged either to admit a mistake or to give you the same score.

Your 'D' could become a 'C' overnight without spending any money.

And it all turns into a game.

Hamish the bewildered.

Reply to the comment left by Hamish McBloggs at 11/02/2023 - 11:00
It does depend on the street but it is very rare for properties in a street to actually be identical, particularly if it is not new build.

Properties may look similar but can be different shapes, have different boilers, different types of bath / shower, different lighting, different windows and doors and the list goes on. These are not described in detail on the certificates but can easily result in a bands difference in rating.

Reply to the comment left by East Midlands Energy Efficiency at 11/02/2023 - 19:10
I completely agree.

About 20 houses, some identical to ours, completed with about a year around 1985 ... mmm.

I will spreadsheet the results and discuss with the neighbours.

I spent all of lockdown up scaffolding insultating. I hate scaffolding. I genuinely fail to see how we cannot achieve 'B' when others can.

It's a reasonable challenge.

Has the methodology of calculation changed at all?

Is there an list of permitted assumptions?

Where is the detail for the calculation kept and can we get at it?

Hamish

Yet another example of the government discriminating against landlords.
When will they force all home owners to upgrade their properties? Never is the answer.

Reply to the comment left by East Midlands Energy Efficiency at 11/02/2023 - 19:10
There must be an acceptable error, an industry standard allowable error. Each measured element of the EPC would have an error bar. And then there's a subjective human attached.

I would like to think that the methodology has been desensitised to these potential corruptions.

If I'm being difficult, apologies, But I feel I have a case. The following are EPC results from a single property. Our final rental property which is going on the market this week. CGT be damned.

on 25 November 2010 D60, potential C74, Enhanced rating B 86

54% of light fitting were low energy so we changed all light fittings to be 'low energy'.

2011 we renewed the loft insulation and increased the depth to something ludicrous.

2011 we filled the cavity walls.

Cumulatively, these changes would put us at C71; just inside 'C', but 'C' nevertheless.

on 5 November 2020 D 61, potential B 87 (10th anniversary).

Quite disappointed, particularly with the murmblings regarding a LL's properties needing to meet minimum requirements.

My expectations of earlier investments made are unfulfilled.

Also, there was a clear change to the presentation of results since 2010. The 'enhanced' potential in 2010 now seems rolled into the 'potential' rating rather than being separately presented.

on 20 February 2023 D 68, potential B 86

Why did we repeat the EPC less than 3 years later ... ?

Our mortgage provider offered us free ones, so why not.

Primarily comparing 2020 and 2023. Zero changes to the property other than general maintenance. Clearing gutters, fixing fences, changing locks ...

The current band 'D' is unchanged but at D 68 is now closer to our aspirational C71. Potential band 'B' unaffected.

BUT BUT BUT BUT

Band 'D' is 14 'units' wide.

The above 'error bar' is 7 units; 2020-2023

Someone is going to have to tell me quite firmly, evidenced, that this is acceptable and then explain why I simply don't understand.

There is clear subjectivity. viz

Wall Cavity wall, filled cavity 'Average' to 'Poor'

Main heating control Programmer and room thermostat goes from 'Average' to 'Good'

Hot water From main system goes from 'Average' to 'Good'

Window Fully double glazed goes from 'Good' to 'Average'

COMMENT

Landlords are relying on this to be accurate. This error bar could change the financial decisions a LL makes. This then has potential consequences for the tenant; they could receive a S21 because it's too expensive to fix.

Look at the numbers

2020 D 61
2023 D 68

If I wait another year and do it again, I won't need solar panels because band C begins at 69.

Continuity of assessor is clearly a consideration. If the same assessor is presented with improvements then the score has to be better than the last one unless the methodology is changed. But assessors die, retire, change career, get promoted ...

If there are changes in calculation methodology since the last EPC then key influencing changes are not articulated.in the EPC.

Final note. Our 5 November 2020 D 61 result and the cost to get us to where we would need to be was a key piece of information when forming our decision to present our tenant with a S21.

Of course there were other factors influencing the S21 decision. We can all list these. If these other factors did not exist I would view the necessary investment more positively.

Hamish