Is an EPC important when buying a rental property?
Before I posted this article I spoke to an experienced landlord who had a small number of properties and asked him if he had an up to date EPC for one of his properties. He just looked at me with a blank expression. I could see he had no idea what I was on about. So i’m sure there will be plenty of landlords reading this article who have no idea what one is and why it is useful. EPC stands for the Energy Performance Certificate every house up for sale must have one and a property shouldn’t be offered for sale without one. The same goes for properties going on the market for rent. The EPC gives you the buyer or the renter lots of information relating to the running costs of the property and how the property can made more energy efficient.
Only the other day I was was searching for a good buy to let deal on Rightmove and Zoopla to post on my blog. I found a lovely 2 bed semi detached house in Crewe, the pictures looked like the property had been we’ll looked after and was decorated nicely just ready to let with no works required. Perfect I thought…… I look at everything including the EPC before I post a deal on my blog!
The information contained within the EPC immediately told me this was not such a great deal. That got me thinking about whether everyone is aware of the implications of the Energy Act 2011 and the energy efficient regulations on the private rented sector. The full regulations can be found here.
The property I was looking at was rated an E with the potential to achieve a B rating. This is significant because the regulations state that from 1 April 2018 it will be illegal to let a property for a rating below an E. If the property was a doer upper I would have felt differently as it is priced lower to allow for the works. This property however is deceiving as the purchaser probably wouldn’t factor in major works. The better looking the property the higher price it commands. Sometimes these can be the most dangerous properties to buy as they have hidden problems and the buyer generally does less probing.
Don’t get me wrong an E rating will be compliant, however how long will it be before the government move the goal posts? Property owners/landlords should remain aware of the government focus on energy efficiency and the implications this will have on the private rented sector. I advise you to plan energy efficiency improvements as part of your ongoing maintenance obligations or when a property becomes void.
Making money on property starts at the beginning of the journey, buying at the right price will protect your investment for the long term. So factor in the costs when making an offer on a property. remember even though a property looks in great condition you must always check the EPC. Knowledge is power when making a property purchase. Buying at the right price is your key to success.