Landlords could be letting illegal properties due to ‘inaccurate’ EPC ratings, report finds

The report notes that floor space is used as a key component to creating an energy rating

The Impacts of Inaccurate Area Measurement on EPC Grades was released today (12 February) by property technology solutions provider Spec. The report claims that inaccurate measures of property floor space have likely led to incorrect EPC scores.

The report claims that up to 2.5 million EPCS are likely to be inaccurate and that an estimated 35,000 E-rated properties are being let illegally, due to be given a higher score than the building would otherwise receive.

The report claims that current measurement techniques used by Domestic Energy Assessors’ (DEA) can lead to inaccuracies regarding floor space measurements. These techniques, the report claims, have created an average discrepancy on property areas of around 8.6% – around 87 square feet.

The report notes that floor space is used as a key component to creating an energy rating, and that a 1% change in property area size could result in a one-point change to an EPC score.

Spec’s senior advisor Antony Browne said: “Our study reveals that it’s not really a case of if your EPC is measured inaccurately, but how much it is measured inaccurately. Inaccurate EPCs present serious challenges and risks not only to property professionals, consumers and estate agents – but also the environment. It means tens of thousands of landlords are unwittingly renting out their properties, opening them up to the risk of fines of thousands of pounds through no fault of their own.

“Measuring the energy efficiency of buildings accurately is essential in limiting their environmental impact and tackling the bigger global issue of climate change. If you are not measuring the problem properly, you won’t tackle it effectively.”

edie has reached out for comment from EnergyTrust, one of the UK’s largest trainers in DEAs and EPC scoring.

Legislative boost

The Minimum Energy Efficiency Standard (MEES) came into effect 1 April 2018, imposing new rules on both domestic and commercial properties within the private rental sector. Before the new legislation was introduced, research found that energy efficiency standards had fallen in almost one-fifth of commercial properties.

The new rules prohibit landlords from granting a tenancy to new or existing tenants if the property has an Energy Performance Certificate (EPC) rating below band ‘E’. Spec claims that 35,000 E-rated buildings could actually fall below the MEES threshold.

Some experts have claimed the new regulation could trigger the emergence of a green rental market. Residential mortgage-backed security (RMBS) investors are likely to realise the potential for additional credit risk arising as a result of non-compliance with MEES, according to credit rating agency DBRS.

Matt Mace

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