If you manage holiday lets in Falmouth, it's important to be aware of upcoming changes to energy efficiency regulations. By 2030, all rental properties, including holiday lets, will need to achieve a minimum Energy Performance Certificate (EPC) rating of C. This requirement is part of the government's Warm Homes Plan, which was first announced in their election campaign.
Implications for Holiday Let Management in Falmouth
For those involved in holiday let management in Falmouth, these new energy efficiency standards could have a significant impact. The shift to a higher EPC rating will influence renovation costs, property value, and even guest demand.
Updated Deadline for Energy Efficiency Improvements
The Labour government has revived the initiative to improve energy efficiency in rental properties, a plan originally proposed by the Conservative government. The previous goal was to upgrade the minimum EPC rating from E to C between 2025 and 2028. However, former Prime Minister Rishi Sunak postponed these changes in September 2023 to alleviate household costs.
Ed Miliband, the Secretary of State for Energy Security and Net Zero, has not yet detailed Labour’s revised plans, but the deadline for compliance has been extended to 2030. Since 2020, all residential properties, including holiday lets, have been required to have at least an EPC rating of E.
Will Holiday Lets in Falmouth Meet the 2030 Requirements?
According to Hamptons' research, if landlords continue to improve energy efficiency at the current rate, it could take until 2042 for all properties, including holiday lets, to meet the new standards. To meet the 2030 goal, about 340,000 rental properties will need to be upgraded each year to achieve an EPC rating of C.
Hamptons' data from the Ministry of Housing, Communities and Local Government indicates that this year, 39% of rental properties with updated EPCs have moved to a higher rating band. Conversely, 13% have dropped to a lower band, and 48% have seen no change. More than half (55%) of properties with new EPC ratings this year have achieved a rating of C or higher. Up to 4% of properties may not meet the required EPC rating of C.
Cost Considerations for Holiday Let Owners
A 2023 survey by Simply Business revealed that 42% of landlords see improving energy efficiency as a major challenge. Nearly 18% expect these upgrades to cost over £10,000, while 25% anticipate costs between £5,000 and £10,000. There might be a spending cap, potentially less than £10,000, which could result in many landlords spending the maximum amount without reaching the desired EPC rating.
Potential Benefits of Energy-Efficient Holiday Lets
Holiday lets with higher EPC ratings could attract more guests by offering lower utility costs. Hamptons' analysis shows that tenants in properties with an EPC C rating could save £499 annually on utility bills compared to those in EPC D-rated properties. The savings are even more pronounced between EPC C and EPC E properties, with an estimated annual saving of £1,248.
Source: Hamptons and Ministry of Housing, Communities and Local Government
With rising living costs, there may be increased demand for energy-efficient holiday lets. Although the initial investment in upgrades might be high, these costs could be offset by higher rental rates and reduced vacancy periods.
Next Steps for Energy Efficiency Regulations
The government will need to provide further details on how these new regulations will be implemented. Landlords of holiday lets in Falmouth should look out for information on:
How property assessments will be conducted
How exemptions might be applied
The spending cap for improvements
Availability of additional funding or support
New regulations will need to be established, possibly following a consultation process.
EPC Regulations Across the UK
These updates are specific to England and Wales, where EPC standards are set by the UK government. Scotland and Northern Ireland have their own energy efficiency regulations.