As gas and electric bills rocket
for Neath tenants, Neath landlords who do not start to make energy efficiency
upgrades face lengthy void periods and will have to discount their rents. This
is irrespective of the Government’s plans to change the rules on renting
properties with low Energy Performance Certificate (EPC) ratings.
Until six months ago, out of the thousands of
tenants I have shown around Neath properties in all my years as an agent, I can
count the number of tenants who have requested to see the EPC of the rental
property on the one hand. Now, it’s the first question tenants ask.
The better the EPC rating, the lower the gas and electric bills.
Neath tenants are leaving
their poor EPC-rated properties which are too expensive to run and moving into
higher-rated EPC rental properties.
The average heating bill for the 2,367 Neath
tenants will rise from £67.82 per month to £176.32 per month.
And their hot water bill will rise
by £32.69 per month and lighting by £21.17 per month.
Each Neath tenant will have to
find an extra £162.37 per month for their gas and electric bills.
To give you an idea of the extent
of the money being spent by Neath tenants on heating alone (ignoring hot water
or lighting), last year it was £1,926,274.45,
and by 2023, it will be £5,008,313.58 a
year.
Yet these stats don’t tell the whole
story.
It is a legal requirement for
every rented property to have an EPC which rates a property on its energy
performance (like those washing machine or fridge ratings, albeit for a
property). A is the best rating, and G is the worst.
Whilst the law states property
cannot be rented with an EPC rating lower than an E in England and Wales, there
are exceptions to this, meaning Neath rental properties are still being let
legally with an F and G rating. Although legislation for a minimum E rating
EPC requirement in Scotland was scheduled in 2020, it never passed through the Scottish
Parliament because of the pandemic.
Let me show you the average saving
in energy bills between the EPC rating of an average Neath rental property.
- A Neath rental property with a D rating will cost
£38.50 more per month than a C-rated property - A Neath rental property with an E rating will cost
£67.66 more per month than a D-rated property - A Neath rental property with an F rating will cost
£97.16 more per month than an E-rated property
Both Westminster and Holyrood governments
now propose introducing a minimum EPC of band C
for all new tenancies from 2025 (and 2028 for existing tenancies).
Irrespective
of this new potential legislation, those Neath landlords with low EPC ratings
will now need to seriously consider making those energy efficiency upgrades to
ensure their Neath rental properties continue to appeal to tenants.
I can
see Neath rental property’s energy efficiency ratings filtering into rental
prices over the winter months.
Neath rental properties with low EPC ratings
will probably rent for between 4% to 10% less than higher energy proficient
properties.
This means Neath landlords could have
to accept between £31.64 and £79.10 per month less for an average Neath
property with a low EPC rating compared to a high-rated EPC rental property.
Any Neath
rental property with a lower EPC rating will also take longer to find a tenant,
especially during the winter. This means some Neath landlords will have the
prospect of void periods early next year.
I
have seen more Neath rental properties coming onto the market in July and
August, so if this trend continues, this will give Neath tenants much more
choice. With the increased supply of rental properties, I certainly believe
some tenants could decide to offer less on Neath rental properties with low EPC
ratings.
So, what are the options?
I am experienced in reading EPC reports and am
aware of the most cost-effective way to improve the EPC rating of your Neath
rental property. Irrespective of whether you are a landlord client of my
agency, another Neath lettings agency, or you even manage your property
yourself – feel free to drop me a message. I will find your EPC on my database
and give you 5/10 minutes of my time, over the phone, at no charge, to guide
you on the best options. What do you have to lose?
