EPC Regulations for Landlords in Wales

Anyone considering renting out property in the North Wales areas of in Llangefni, Bangor, Caergybi, Gwynedd a Ynys Mon needs to know about energy performance certificates (EPCs) for landlords. 

If you rent out a property in England or Wales, prioritising energy efficiency is important not only because it is a legal requirement, but also because it helps attract new tenants (contract holders). With growing attention on energy use in the media, applicants increasingly want to know how energy efficient a property is, since this directly affects how warm, comfortable, and affordable it will be to heat.

On top of this, achieving the best rating for your property is a good idea for the environment. These are the EPC rules and regulations that private landlords should meet. 

What is an EPC for landlords? 

An energy performance certificate (EPC) is a document which sets out how energy efficient a property is. To get an EPC, your home must be assessed by an accredited inspector who will give it a rating from A to G – with A being most efficient. The EPC report contains the property’s energy use and typical energy cost along with recommendations for reducing energy use. The assessors will inspect the property’s: 

• Exterior walls 
• Roof insulation 
• Floor 
• Windows 
• Open fireplaces 
• Boiler 
• Lighting 
• Heating system 
• Heating controls 
• Hot water cylinder insulation 
• Ventilation system 
• Conservatory and extensions 

What are the current EPC requirements for landlords? 

To market your property for rent or sale you must have a valid EPC – they last for 10 years. In England and Wales, rental properties must achieve at least an E rating to comply with the law. This is called the Minimum Energy Efficiency Standards (MEES), which came into force on 1 April 2018 for new tenancies, and on 1 April 2020 for existing tenancies/contracts. 

Are there new EPC rules for landlords on the way? 

The current system measures the property’s energy efficiency based on cost; however, this is also being reviewed, and there are talks of a more in-depth rating system and a change to the exemption threshold. This could mean landlords that currently have an EPC rating of C or above may find the new criteria lowers their rating. So, regardless of your current energy rating it would be worth keeping an eye on the changes being made.

What if my property does not meet minimum standards in Wales? 

If your property doesn’t reach the current minimum EPC E rating, you will need to take action to improve its energy efficiency. Start by looking at your EPC report, which will include things you can do to improve your rating. These could be upgrading the boiler, adding double glazing or installing loft insulation as well as simple measures like draught excluders or LED lightbulbs. 

Are there EPC grants in Wales to help landlords improve their rating? 

For landlords who need to make improvements, there is a cost cap, meaning you shouldn’t need to spend more than £3,500. Find out about grants and sources of funding that can help on the gov.uk website. 

Y Green Deal for energy-saving improvements is closed to new applicants, and unfortunately the Warm Homes EPC improvement grants from local authorities aren’t offered in Wales. 

However, if your tenant receives certain benefits your property may be eligible for improvements at no cost through the Welsh Government’s Nest scheme. For instance, it can cover the costs of installing solar panels, insulation or a heat pump. 

If it would cost more than £3,500 to improve your property to the required standard, and you are not able to secure grants to help with the cost, you are able to register an exemption. Read more on the gov.uk website. 

Are there EPC exemptions in Wales? 

There are several EPC exemptions for residential properties, but you must submit evidence to the PRS Exemptions Register. The current, common EPC exemptions include: 

• New landlord exemption. If you have become a new landlord in unusual circumstances, you can claim a temporary exemption lasting 6 months. This allows you time toimprove the property’s energy efficiency or apply for an exemption.  
• ‘All improvements made’. This exemption applies to landlords who have made all recommended improvements yet still fall short of the MEES. 
• High-cost exemption. If the works would exceed the EPC cost cap, you can provide a quote as evidence to claim a 5-year high-cost exemption.  
• Wall insulation exemption. This exemption applies if the only EPC improvement you can make is wall insulation, which an independent expert deems unsuitable for your rental property. Check the government website for the approved list of conservation accredited professionals. 
• Property devaluation exemption. Exemptions can be given where a RICS surveyor advises that improvements would lower the property’s market value by over 5%. 
• Consent exemption. If the necessary improvement works need third party approval, such as planning consent or permission from the freeholder, landlords can seek a 5-year consent exemption.  

Who can carry out an energy performance assessment? 

Only qualified assessors can carry out an energy performance assessment and issue an EPC. Ask your letting agent, as they can often arrange the assessment with a trusted assessor covering North Wales. 

Do I need to give the EPC certificate to tenants? 

Yes. Landlords in Wales have a legal obligation to give tenants a copy of the current EPC certificate before the sign the tenancy agreement. 

How much does an EPC cost in Wales? 

The average EPC costs from £60 to £120 or more. Ask for several quotes and expect the exact cost to be determined by the size of the property, number of bedrooms and location.  

What is the penalty for not having a valid EPC as a landlord? 

Landlords who don’t have an EPC could receive a £200 fine, but the maximum fine for contravening EPC rules reaches up to £5,000. So in short, holding a valid energy certificate is far cheaper than the penalties. 

Why is it worth making energy efficiency improvements? 

Even if your property meets the required rating, it is still worth investing in energy efficiency improvements. With the high cost of energy and pressure on the cost of living, tenants (contract holders) are increasingly looking for homes which are warm, easy to heat and with lower bills. Better insulation and heating can also reduce the risk of condensation and damp which can be a major health issue for your tenants. 

While the EPC rules change hasn’t yet become law, the climate crisis isn’t going away, and neither are energy costs. If you decide to sell the property in future, a decent EPC rating can also be an advantage to attract buyers.  

If you’re looking to rent out property in Anglesey or Gwynedd in North Wales, we can help you with the letting rules, regulations and obligations that come with being a landlord – including energy performance certificates. Contact us today.