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EPCs Required For Buy To Let Investments

Sep 2, 2008
From Oct 2008 buy to let investors offering property for rent will be required by law to provide prospective tenants with an Energy Performance Certificate for their property.

The certificates (EPCs) are going to have to be provided freely, either when (or before) any written information about the property is provided to prospective tenants or a viewing is carried out. They won't have to be provided if the landlord believes the prospective tenant is not likely to have available funds to rent the property or is not genuinely interested.

A new certificate will not be required on each let since, in the case of rental property, EPCs will be valid for ten years.

The requirement is being introduced to comply with the EU's Energy Performance of Buildings Directive (EPBD) which applies to all property, including buy to let property. This became law in 2003 and allowed until January 2009 for full implementation so as to provide time for sufficient numbers of energy assessors to be trained.

The Directive's requirements have been introduced into English and Welsh law along with the controversial Home Information Pack regulations that order sellers to produce packs providing information about their title, local searches, plus an Energy Performance Certificate. The full requirements are included in the Home Information Pack (No 2) Regulations 2007 and the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007.

In Scotland, the Single Survey, the equivalent to HIPS, also includes an energy report requirement.

So far as energy performance is concerned, the regulations order an Energy Performance Certificate when a building is constructed, sold or let. When included in a HIP related to a property sale, the EPC should be no more than twelve months old when the property is first advertised. In other circumstances EPCs have a ten year life.

HIP requirements have already come into force so far as 3 and 4 bedroom properties are concerned. And EPCs will be required for all new builds from 6th April 2008, and for all rentals as from 1st Oct 2008.

In Scotland EPCs for buy to let properties module be required by January 2009.

By 2009, all buildings in the UK that are constructed, sold or rented out will have to have an EPC. In the case of larger public buildings a 'Display Energy Certificate' will have to be on show.

There are a number of different permitted assessment methods, their use depending upon the type of building being assessed. Dwellings will usually be assessed using the 'Reduced Data Standard Assessment Procedure' (RdSAP), an industry agreed accepted that allows some data to be inferred.

Its use involves inspectors collecting accepted information on the type of property and construction, the property dimensions including room sizes, types of windows, water heating systems and controls, and other details including wall, loft and water tank insulation. Agreed reference coefficients are then applied to arrive at an energy rating.

Energy Performance Certificate's for dwellings will rate the energy performance of buildings (not the appliances within them) on a scale of 'A' to 'G' - where 'A' is the most efficient, and 'G' the least. This module be displayed graphically in a similar way as present forcefulness labelling goods such as fridges and dish washers.

Two ratings will be shown: an overall energy efficiency rating, and an environmental impact rating in terms of carbon dioxide emissions - the higher the rating, the less impact on our environment.

The idea is that because Energy Performance Certificate's will be prepared using accepted methods with accepted assumptions, it will be possible to make comparisons of the energy efficiency of buildings. The Government argues that in the case of rental properties, high rating module be more desirable and will have most effect on the marketability of properties - and hence ultimately on rental levels.
About the Author
For further information on EPCs visit Residential Landlord the complete online resource for landlords and property investors with UK buy to let property investments.

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