Energy Performance Certificates – are changes in the air?

Here's an update for London landlords on the government's plans and proposals around EPC, by Foxtons Director of Legal & Compliance, Manjit Kataora.

In February this year, the Government closed its consultation into reforms to the Energy Performance of Buildings regime. The consultation is a major step towards the government’s overall net zero agenda: to achieve net-zero emissions nationally by the year 2050.

One the key elements in the report was the reform of Energy Performance Certificates regime.

The law on Energy Performance Certificates is contained in the Energy Performance of Buildings (England and Wales) Regulations 2012 (“EPC Regulations”). EPCs are the primary accepted means of rating the energy performance of a building. Ratings (from A to G) assess the energy efficiency of a given building, in theory allowing anyone renting or buying a property to gauge whether that building will cost more or less to run than an equivalent alternative property.

The problem is that these ratings are based on standardised heating patterns, temperatures and fixed fuel price assumptions hence they are (or can easily become) outdated and therefore not (always) accurate. To take a simple example, a heat pump (usually regarded as an efficient means of heating a home compared to gas) that replaces a gas central-heating system, might on the surface suggest an improvement in the cost efficiency of a given home. But price fluctuations in the cost of electricity compared to gas might mean that the heat pump is actually more expensive (this is the same issue as one hears more often nowadays about the cost of running an electric car vs an internal combustion engine vehicle).

To address this, the government proposes a range of additional metrics that would go to make up a more detailed (and accurate) picture of the energy efficiency of a building. It proposes that domestic EPCs use four main ‘headline’ metrics. These are ‘fabric performance’ (thermal properties of the construction) ,‘heating system’ (ranking different heating systems based on technology and type) ‘smart readiness’ (smart meters; solar panels, etc) and ‘energy cost’ (the predicted energy consumed by the building) Other secondary metrics would add to the picture. Combined, all of them would allow a consumer to assess more accurately how efficient a home was overall.

The answer to why any of this matters at all is that, based on the government statistics, buildings account for about 20% of the UK’s total greenhouse gas emissions. Improving the thermal efficiency of buildings, therefore, represents a major part of the journey toward net-zero.

What the government then has to do is settle on a way of displaying these metrics in an easy-to-understand way that makes sense to consumers without confusing them.

Currently, the aim is to introduce changes to EPC metrics in the second half of 2026 and the consultation also explores the proposal to reduce the lifespan of an EPC (currently 10 years and only legally required to be renewed when the property is let or sold).

These aren’t firm plans but proposals. Consultations require engagement by stakeholders (interested groups within society). The government is now busy considering responses to the consultation and we can but wait and see where these will land, or whether these plans will succumb to another rapidly evolving climate change – namely the macroeconomic one.

A copy of the consultation can be accessed here.

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Landlord Essentials is a series of articles where our experts delve into the big questions for London landlords. If you have a question on letting your property in London, or you want help making your property a success, get in touch with Foxtons lettings team.

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