Energy performance comes to the letting market

Introduced last year, for all properties available for sale, the Energy Performance Certificate (EPC) is becoming compulsory for all lettings properties on the market from October 1st 2008. The intention is for the EPC to try and influence individuals to consider energy efficiency as part of their decision to occupy a building.

Jane Ingram, Head of Savills Lettings, comments: “The impact of the credit crunch, in conjunction with soaring energy prices, is making consumers more aware of the amount of money they have and how much they spend. Whilst last year, this initiative may have been brushed aside as unnecessary, the current economic climate is such that it may well have an impact on the tenant’s decision making process. This will be particularly relevant for non corporate properties outside Prime Central London.”

So, what does this mean for Landlords? “An EPC is relatively inexpensive and will be valid for ten years” comments Ingram. “From 1st October, it will be compulsory for all Landlord's to provide an EPC prior to any lettings viewings, failure to do so could result in a fine. If a property is currently tenanted, or the contract is being renewed, an EPC will not need to be carried out until that tenancy comes to an end.”

“The current high levels of stock in the lettings market, the result of a softening of sales values since the beginning of the year, has significantly increased the amount of choice prospective tenants have. For those tenants looking to rent in areas where there is a wide diversity of property, a high EPC rating may well influence their decision about which property to opt for.”

Sara Tebbs, of Savills Chelmsford, comments: “Tenants can, of course, ask a Landlord to make changes as part of an offer but Landlords are under no legal requirement to oblige. That said, given the level of stock within the market place, some Landlords may want to consider ways in which they can make their properties more energy efficient thereby giving their property an edge on the competition.”

“It is, however, worth remembering that Landlords may be restricted in what measures they can take to increase the energy efficiency of their building. For example, if the Landlord owns a flat within a converted block, carrying out roof insulation will require not only the consent, but also the financial input, of other residents.”

“For properties which are managed by us, our property management teams will be able to recommend and arrange an EPC for our Landlords and any works that they would like to be carried out as a result of the report.”

For more information, log on to Savills.com.