EPC F & G Properties: What Landlords Must Know

Current Legal Position

Since 1 April 2018, it has been illegal to let privately rented properties with EPC ratings of F or G in England and Wales, unless a valid exemption is registered.

Key Legal Requirements

• Minimum standard: EPC E (score 39-54) or above
• Application: All new tenancies and renewals since April 2018
• Existing tenancies: Applied from 1 April 2020
• Exemptions: Available but must be properly registered
• Cost cap: Maximum £10,000 spend required per property

Understanding F & G Ratings

EPC F Rating (Score 21-38)

• Typical properties: Pre-1930s uninsulated homes
• Common features: Solid walls, single glazing, old boiler
• Annual energy bills: £2,000-2,500+ for average house
• Improvement potential: Usually significant scope for upgrades

EPC G Rating (Score 1-20)

• Typical properties: Very old, unimproved buildings
• Common features: No insulation, very inefficient heating
• Annual energy bills: £2,500-3,500+ for average house
• Improvement challenge: Often require major investment

Penalties for Letting F & G Properties

Financial Penalties

Additional Consequences

• Rent Repayment Orders: Tenants can claim back up to 12 months rent
• Section 21 restrictions: Cannot evict tenants using no-fault eviction
• Insurance issues: Some policies exclude non-compliant properties
• Mortgage problems: Lenders may refuse BTL mortgages
• Reputational damage: Public register entries visible online

Improvement Strategies for F & G Properties

F-Rated Property Upgrade (Typical Cost: £3,000-8,000)

Priority 1: Essential Improvements

1. Loft insulation (0 to 270mm): +10-15 points (£300-500)
2. Cavity wall insulation: +10-15 points (£500-1,200)
3. Basic heating controls: +3-5 points (£300-600)
4. LED lighting: +2-3 points (£100-200)

Priority 2: Additional Measures

1. Draught proofing: +2-4 points (£200-400)
2. Hot water cylinder upgrade: +3-5 points (£800-1,200)
3. Double glazing (if single): +5-10 points (£3,000-8,000)

G-Rated Property Upgrade (Typical Cost: £5,000-15,000+)

G-rated properties often need comprehensive renovation:

Essential Package

1. New boiler (G to A rated): +20-25 points (£2,500-3,500)
2. Full insulation package: +15-20 points (£2,000-5,000)
3. Heating system upgrade: +5-8 points (£1,000-2,000)
4. Window improvements: +5-12 points (£3,000-8,000)

Cost-Effective Improvement Pathways

F to E in Under £3,000

Target: Gain 15-20 points

1. Loft insulation top-up: +8 points (£350)
2. Cavity wall insulation: +10 points (£800)
3. Smart heating controls: +4 points (£600)
4. LED bulbs throughout: +2 points (£150)
5. Total: £1,900 | Result: Solid E rating

G to E with Major Works

Target: Gain 25-35 points

1. Replace G-rated boiler: +20 points (£3,000)
2. Basic insulation package: +12 points (£1,500)
3. Heating controls: +4 points (£600)
4. LED lighting: +2 points (£150)
5. Total: £5,250 | Result: Good E rating

When Exemptions May Apply

Common Exemption Scenarios for F & G Properties

1. High Cost Exemption

• When: All improvements to reach EPC E cost over £10,000
• Example: Listed building needing expensive sympathetic improvements
• Requirements: 3+ quotes showing costs exceed cap
• Duration: 5-year exemption period

2. Technical Exemption

• When: Improvements technically impossible
• Example: Solid wall property where insulation would cause structural issues
• Requirements: Professional technical assessment
• Evidence: Structural engineer or energy assessor report

3. Listed Building Exemption

• When: Improvements would alter historic character
• Example: Georgian terrace where external insulation refused planning
• Requirements: Conservation officer confirmation
• Scope: Only applies to character-affecting improvements

Immediate Action Plan for Non-Compliant Properties

Step 1: Assess Current Situation (Week 1)

1. Review EPC: Confirm current F or G rating
2. Check tenancy status: When does tenancy end/renew?
3. Legal review: Are you currently in breach?
4. Professional assessment: Get improvement recommendations

Step 2: Evaluate Options (Week 2)

1. Cost improvement works: Get quotes for reaching EPC E
2. Consider exemptions: Assess eligibility for exemptions
3. Financial planning: Budget for improvements or exemption costs
4. Timeline planning: Coordinate with tenancy arrangements

Step 3: Implement Solution (Weeks 3-8)

1. If improving: Book contractors and implement works
2. If claiming exemption: Gather evidence and register exemption
3. Tenant communication: Inform tenants of planned works
4. Compliance documentation: Keep all records for enforcement

Step 4: Verify Compliance (Week 9)

1. New EPC: Obtain updated certificate showing E rating
2. Exemption confirmation: Ensure exemption properly registered
3. Tenant notification: Provide updated energy information
4. Record keeping: File all compliance documentation

Funding and Financial Support

Available Grants and Schemes

• ECO4 scheme: Free insulation for eligible properties
• Local authority grants: Vary by region, check council websites
• Energy supplier schemes: Some offer improvement grants
• Green financing: Low-interest loans for energy improvements

Tax Implications

• Capital allowances: Some improvements qualify for tax relief
• Revenue deductions: Repair and maintenance elements may be deductible
• Depreciation benefits: Improvements may reduce taxable profits
• Professional advice: Consult accountant for tax optimization

Tenant Relationships and Communication

Managing Tenant Impact

• Early communication: Inform tenants of planned improvements
• Access arrangements: Coordinate installation schedules
• Temporary arrangements: Budget for alternative accommodation if needed
• Benefit explanation: Highlight lower bills after improvements

Legal Protections for Tenants

• Quiet enjoyment: Minimize disruption during works
• Habitability: Ensure property remains liveable during improvements
• Notice requirements: Proper notice for access and works
• Compensation: Consider rent reductions for major disruption

Long-term Strategy for F & G Properties

Portfolio Assessment

• Identify all F & G properties: Comprehensive portfolio audit
• Prioritize improvements: Worst-performing properties first
• Budget allocation: Spread improvement costs over time
• Professional management: Consider specialist energy efficiency consultants

Investment vs Disposal Decisions

• Improvement economics: Compare costs to property values
• Rental yield impact: Higher efficiency = better tenant demand
• Future compliance: Consider 2030 EPC C requirements
• Exit strategy: Some properties may be better sold than improved