New EPC requirements at Skipton International

As a responsible lender, Skipton International, the Guernsey-licensed bank which specialises in mortgage lending for the UK Buy-To-Let sector for non-UK residents, is making its borrowers aware of the proposed upcoming changes to the EPC regulation.

As a responsible lender, Skipton International, the Guernsey-licensed bank which specialises in mortgage lending for the UK Buy-To-Let sector for non-UK residents, is making its borrowers aware of the proposed upcoming changes to the EPC regulation. The Bill has been put forward to make provision to increase the minimum energy performance of buildings; and for connected purposes. 

A brand-new law is being proposed that, if passed, will lead to new requirements for Buy-To-Let landlords who own property in the UK. The Domestic Properties (Minimum Energy Performance) Bill details Energy Performance Certificates (EPC) requirements for those who own rental properties.

An EPC is a certificate that shows how energy-efficient a property is. The document includes estimated energy costs, as well as a summary of your home's energy performance-related features. EPCs also include recommendations on measures that would make your home more energy-efficient, along with estimated costs for implementing the changes and the potential savings you could make.

UK properties are given an energy-efficiency grade between A and G (whenever a property is built, sold or rented), with A being the most energy-efficient and G being the least. Newly-built homes tend to have high EPC ratings, while older homes sometimes have lower ratings.

The Government has identified that homes in England and Wales contribute to around 1/5 of all carbon emissions and, in order for the UK to reach its Net Zero Strategy target, the Government has decided to focus on improving the energy efficiency of homes, especially rental and newly-built properties.

Since 1 April 2020, landlords can no longer let or continue to let properties covered by the Minimum Energy Efficiency Standard if they have an EPC rating below E, unless they have a valid exemption in place.

The proposed Bill requires that all new tenancies must be in a property that has an energy efficiency performance of at least EPC Band C from 31 December 2025, and all existing tenancies must be at least EPC Band C from 31 December 2028 where practical, cost-effective and affordable. It remains unclear whether the new EPC requirements for UK rental properties will come into effect in 2025 but further changes scheduled for 2028 and 2030 respectively are likely to continue as planned.

Skipton has confirmed that it will be taking a proactive approach to ensure its customers are able to meet the future EPC requirements (should they come into force).

With effect from 3 May 2022 the bank will only be lending against UK rental properties with an EPC rating of A – D, and only where the D rated properties have the potential to improve their EPC rating to C.

Roger Hughes, Business Development Manager said: “whilst much speculation continues as to when this proposed Bill and EPC deadlines will come into effect, we wish to position ourselves as a bank that will only lend on properties that support the governments decarbonising strategy”.

Skipton International lends to British Expats and Foreign Nationals on UK Buy-To-Let properties.