What is EPC Rating?

Full Definition

An Energy Performance Certificate (EPC) rates a property's energy efficiency on a scale from A (most efficient) to G (least efficient), based on an assessment of factors including insulation, the heating system, windows, and lighting, carried out by an accredited domestic energy assessor. An EPC is a legal requirement whenever a property is built, sold, or let (though not simply when it is renewed on the same tenancy), must be commissioned before a property is marketed, and remains valid for 10 years unless works are carried out that would materially change the rating sooner. For rental properties in England and Wales, the Minimum Energy Efficiency Standards (MEES) regulations currently require most private rented homes to have an EPC rating of E or above before a new or renewed tenancy can begin, with limited exemptions available (registered for up to five years) where a landlord can show that reaching an E rating is not possible, would devalue the property, or requires improvements a tenant or superior landlord will not consent to. Letting a property below the minimum standard without a valid registered exemption can result in a civil penalty of up to 5,000 pounds per breach from the local authority (Trading Standards). Government policy in this area has shifted over time, with proposals at various points to tighten the minimum standard for rental properties to a C rating, though implementation dates for such reforms have been repeatedly delayed and landlords should check current government guidance for the latest position before assuming a specific future deadline. A higher EPC rating can also affect a property's value and desirability for buyers and tenants increasingly conscious of energy costs, and can, in some cases, affect mortgage eligibility, since some lenders now offer preferential "green mortgage" rates for highly energy-efficient properties, or, less commonly, decline to lend on the very lowest-rated properties without improvement plans.

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