An influential group of MPs has called for the replacement of “outdated” Energy Performance Certificates with new ‘Building Renovation Passports’.
Currently EPCs have to be shown to prospective tenants and each rental property must have a rating of E or above; the government wants to raise the minimum energy efficiency rating from E to C for new tenancies from 2025 and for all existing tenancies from 2028.
However, now the all-party Environmental Audit Committee, under the leadership of Conservative Philip Dunne, says EPCs are outdated and currently do not support energy efficiency and low carbon heating measures.
Instead EPCs should be replaced by Building Renovation Passports “developed with an approved, standardised methodology.”
EPCs were first introduced by the UK government on August 1 2007, under the EU directive on the energy performance of buildings; at the time they were to be part of the ill-fated Home Information Pack, scrapped in 2010, but the EPCs themselves were maintained with all party support at the time.
Today there are three EPCs – the domestic certificate of the kind dealt with by agents routinely, for the sale or rental of a residential property; secondly there is a commercial property EPC; and thirdly there is a display EPC, for public buildings.
The call to scrap domestic EPCs comes as part of the Environment Audit Committee’s wide-reaching recommendations, and its strident criticism of the government’s attempts to reach its own legally-enforced Net Zero targets for 2050.
Broadly, the MPs say the government appears to have underestimated the costs to decarbonise UK homes by 2050, at between £35 billion and £65 billion. Some 19 million UK properties need energy efficiency upgrades to meet EPC band C, and the committee has heard in evidence that it can cost on average £18,000 per home – far greater than the government’s estimate.
In recent weeks ARLA Propertymark has criticised the EPC improvement targets set by government, feeling the may be a disincentive and that prospective buy to let investors could just walk away instead.
As an alternative, Propertymark wants to link improved energy efficiency with property taxes.
This could include using tax breaks such as making energy improvements exempt from VAT, and/or offering lower rates of council tax for properties that have been made more energy efficient. The organisation also suggests an adjustable rate of property tax tied to energy performance, thus shifting tenant and buyer preferences towards more energy-efficient homes.
This post has originally been featured in Letting Agent Today.