How a high EPC rating and rising energy prices could make your landlord's property more attractive

5 October 2021

With energy prices rising and a proposed increase to the Minimum Energy Efficiency Standards on the horizon, now could be the time for your agency's landlords to meet their tenants' demand for an energy efficient home - and their future compliance obligations.

The pandemic has shown that in the midst of a crisis, there are opportunities out there for businesses flexible and agile enough to spot them and act quickly. The energy crisis is no different. Estate and letting agents can help support their tenants and landlords and ensure that properties stand out by leaning on the growing necessity to offer a green and energy efficient home - and by sharing the resources available in our energy crisis hub.

Minimum energy standards obligations

Most private rented properties are already required to have a Minimum Energy Performance Certificate (EPC) rating "E" in England and Wales as of April 2020. The government has since proposed raising the minimum standards to EPC Band C by 2028 for all private rented properties, to improve the overall energy performance of the English and Welsh private rented sector.

These regulations are in line with the government's goal to reach net zero by 2050. The energy in housing accounts for 14% of total UK emissions, according to the Committee on Climate Change, and privately rented properties are among the least energy efficient, “costing over £6bn in energy bills in 2018 and producing GHG emissions of around 11 megatonnes of carbon dioxide equivalent a year”. The private rental sector is therefore under pressure to play its part in reaching the government's lofty targets.

Download a free FAQ template to answer your tenants' questions on the energy  crisis

Opportunity in rising energy prices

While these obligations are stringent and do require an investment from landlords to meet their energy requirements - capped at £3,500 per property - there is also an opportunity for landlords who look ahead to ensure a long-term return on their property investment.

Energy prices are increasing, due to wholesale gas price rises and this may well translate into increased demand for energy efficient properties. You can help your tenants and landlords understand how these energy prices may affect them with free FAQs to download and share:

Demand from tenants, although currently strong, will always ebb and flow and making energy efficiency investments now to demonstrate a higher EPC rating of a property could help safeguard the attractiveness of your landlord's property during the ebbs.

Tenant appetite for energy efficiency

If your landlords start to make any relevant upgrades to properties now, they'll be able to take advantage of growing tenant sentiment for energy efficient properties - whether to keep current tenants in the property for longer or to attract new energy-conscious tenants - and get on top of the changes to spread costs over a longer period. Or, if the property is already energy efficient, ensure that this is emphasised in your marketing, over and above the presence of the EPC proving its energy performance.

Tenants were already showing an appetite for energy efficient properties, and this rise in energy price will only bolster this sentiment - recent research shows that 63% of renters think about saving energy in their home.

In line with these energy expectations, smart technology is also increasing in popularity. In the build-to-rent sector, tenants shared that they'd be willing to pay 20% more in rent on average for a property with smart technology. Applying this to monitoring energy consumption in a property is an easy way to show your tenants that you and your landlord take energy consumption seriously and enable them to keep track of their own energy usage.

Want the latest lettings new delivered straight to your inbox every week? Sign up to our mailing list and stay up to date, and read our complete guide to lettings legislation in the private rented sector to help your agency stay compliant.

See how you could slash your admin time with Goodlord

Create a tenancy agreement in 90 seconds

Discover why