Graphic of an Energy Performance Certificate efficiency rating table

Category: epc

Labour have confirmed their commitment to improving Energy Performance Certificate (EPC) ratings in rental properties. However, will this conflict with the previous government’s plans to replace this system with Home Energy Model (HEM) assessments.

Earlier this month, Ed Miliband commented in a parliamentary debate that the Labour government will instigate a minimum EPC rating of ‘C’ in rental properties across the country, as part of broader initiatives to improve accommodation standards.

With energy efficiency targets absent from King Charles’ speech to the House of Lords last week, landlords have been left uncertain on whether this still formed part of Labour’s plans, but Miliband’s comment has brought it back to centre-stage.

This is what Ed Miliband said, during the Clean Energy Superpower Mission parliamentary debate on the 16th July:

One thing that this Government will do that the last Government did not is demand that landlords raise the standard of their accommodation to a proper energy performance certificate standard C by 2030.

This is not good news for landlords, who face the cost of bringing their properties into line with no financial help as yet on offer.

But, there are benefits. Many lenders offer preferential ‘green’ mortgage rates to landlords with properties with EPC ratings of A-C. And, of course, good EPC scores have positive environmental considerations, too. 

However, when the Conservatives were pursuing similar plans, the overbearing message from landlords was that the costs were feared to far outweigh any potential benefits.

What happened to HEM assessments?

During Rishi Sunak’s tenure as Conservative prime minister plans were brought about to potentially phase out EPC assessments in favour of a “Home Energy Model” (HEM) assessment. HEM assessments aimed to provide more thorough and accurate measurements of a property’s energy efficiency. The plans suggested this would be implemented in 2025.

With Labour now in power, it is unclear if this change will come about.

Miliband speaks about improving EPC standards by 2030. This would appear to be incompatible with the Conservative government’s aim to make HEM reports the norm by 2025. But, of course, Labour are not beholden to any Tory policy enacted before they came into power. Nonetheless, the lack of clear commentary on the topic presents uncertainty. 

Without a clear picture of how the energy efficiency of a rental property will be measured, landlords won’t have any clue what improvements they need to make.

As a result, Labour will first need to make a decision on this before they can set a standard to be achieved and implement a deadline. That deadline has to be reasonable and achievable, and after the party’s U-turn on Section 21, you might be forgiven for wondering whether, once they get into the detail of this, the picture may change again on this too.

Commercial Trust will be monitoring Labour’s approach to energy efficiency for the private rental sector closely and will keep those subscribed to our newsletter updated.

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