In recent years, the British government has embarked on a concerted effort to improve the energy efficiency of our homes. Using grants for insulation and ‘greener’ energy sources, our housing stock is, gradually, being brought up to a higher standard which has benefits to both the environment and our wallets: increased energy efficiency means lower emissions and a smaller carbon footprint, as well as lower energy bills and more comfortable living environments.
One of the key initiatives in this area is the introduction of the Minimum Energy Efficiency Standards, otherwise known as MEES. These standards became law in April 2020 (we wrote about this here) and in short, outline how rental properties must have an E rating or above (if they do not, the landlord must make improvements before letting them out). An EPC rating of an E or below is poor in terms of energy efficiency and means that tenants will have high running costs and a higher carbon footprint.
Some properties were previously exempt from these requirements, for example some older, listed properties and those in conservation areas; this has now changed and every single property available to let now requires an EPC. However, the introduction of MEES has led to confusion regarding whether these types of properties are exempt from EPCs during sales.
Many estate agents and owners believe that all listed buildings are exempt from EPCs, but things are not as clear cut as this. Today, the UK’s most prominent agents recommend to owners and landlords that all properties for sale should have an EPC. In addition, many solicitors will now not exchange on a house sale without an EPC even if it has a listed status. The confusion here is that whilst EPCs are
a requirement for renting out listed properties since 1st April 2020, there is no legal requirement for sales, and it is usually down to the decision of the conveyancing solicitor if they require an EPC to exchange on a sale. If the property is for rent it needs an EPC regardless and the fines are steep if you don’t comply – between £500 and £5,000.
The EPC on a listed building should be considered as a guidance document to save fuel costs and make it more energy efficient. There is no obligation to carry out the measures and indeed many listed buildings would be able to apply to the Exemption Register to continue being rented. A successful exemption application is valid for 5 years and Fourwalls would be able to arrange this for you.
Fundamentally, it is the responsibility and decision of the homeowner and they are recommended to seek advice, before or after an EPC, from the local authority conservation officer if there are concerns that the recommendations would detrimentally alter the building’s character.
The issue is to do with the wording of a particular phrase in MEES legislation:
“Listed or officially protected buildings where the minimum energy performance requirements would unacceptably alter it.”
The first step would be to book an EPC survey because unless an EPC has been carried out in the past, it would be impossible to know if it meets the minimum requirements to comply with MEES, or what recommendations are advised and works would be required to get it to the right standard. Many listed buildings that are well-maintained with modern heating systems would get an E rating or above and therefore there would not be a concern, but an EPC is required in order to establish the rating and what further action may be required.
In most cases we would recommend that an EPC is carried out together with our other services and this can be considered an advisory document. Although it is the decision of the homeowner, an EPC may subsequently be required by a buyers’ solicitor to progress the sale. If you or your client are unsure about whether an EPC is needed for a listed building, the best thing to do is speak to the area’s local conservation officer. They will be able to tell you what work is recommended (particularly if the property needs bringing up to a higher standard) and how these works can be carried out safely and within the allowances of the listing or conservation scheme. Once these permitted works have been undertaken, if the EPC still does not achieve an E rating it may be possible to apply to the EPC Exemption Register if you meet one of the exemption criteria such as ‘high cost’, ‘all improvements made’ or ‘wall insulation’, which is particularly relevant to listed buildings as it may deface and devalue the property.
However, we anticipate that the confusion will continue for some time as the EPC legislation is based on EU law. Once the dust has settled from Brexit, we may receive different, and somewhat clearer, guidance.
We would recommend carrying out an EPC for any existing domestic dwelling as it can save you money if you undertake the recommended work to increase energy efficiency. Older properties were built before the conception of energy efficiency and EPCs and can be notoriously expensive to heat and run but increasing their efficiency may not be nearly as problematic as is often expected, plus it could significantly cut the cost of bills.
Fourwalls undertakes EPCs on behalf of private clients and agents; if you would like any more information about EPCs or the process, please don’t hesitate to get in touch. We are also an ‘Exemption Agent’ so can assist if a property needs to be placed on the Exemption Register.