Using Energy Performance Certificates to attract tenants

Many landlords have an issue with getting the right type of tenants.  Quite naturally, Landlords want tenants who will pay on time, take good care of the property, and keep open lines of communication with both the letting agent and the landlord.

These tenants also tend to be the ones who stay in a house for longer.  In short, Landlords prefer tenants who both think in the longer term but who also care about others. At some point most landlords have found that compromising slightly on rent to get a better client can save more money than holding out to get the highest possible rent no matter who the tenant is.

As a company who provide landlord insurance, we have a good idea of the difference between a professional landlord who takes a long term view and the sort of ‘accidental landlord’ who typically goes for the maximum short term profit whilst not screening their tenants or not taking out the correct precautions.

However, although it is cheaper to screen tenants and even to attract the best through small discounts, it is even cheaper to pre-qualify them through your marketing and packaging of your rental property – this is where EPCs can play a role.

The sort of client who cares about the energy efficiency of a home is the sort of tenant that most landlords will want to attract – while it may show the tenant has green credentials, it can also show that the tenant is considering their long term financial situation by gauging how expensive the bills may be. So, if a house has a good (or even average) EPC rating, we think that the landlord should sell this to the potential tenants – when the house is being advertised.

We have heard more and more reports of tenants asking for the Energy Performance Certificate rating before renting a home.  With increased awareness of Energy Performance Certificates no longer over shadowed by Home Information Packs, we believe this will only grow.  This is very sensible as this has a big effect on their total costs – especially if they are planning to stay in the house for a long time.

A prospective tenant who asks about the energy efficiency of a home is the sort of tenant who is planning for a long term stay.  They are also the sort of tenant who is prepared to take responsibility for their tenancy and to think of the place as their home rather than as an extended hotel room.

Some less experienced landlords complain about tenants not treating the property with respect – but wiser landlords simply look out for those tenants who will treat the property with respect.

Energy Performance Certificates will be available to landlords who have recently bought a property.  If the property was bought a long time ago then a new EPC must be commissioned.  If a landlord has renovated their property, particularly if there has been work done to increase the insulation, improve the heating system or other related parameters in the EPC, then a landlord can get the full benefit of these improvements reflected by commissioning a new Energy Performance Certificate.

Using an EPC rating in a property advertisement, can help attract the type of responsible long term tenant that every experienced landlord knows is important for a stress free profitable business.

Written by Alex Matthews

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9 Responses to “Using Energy Performance Certificates to attract tenants”

  1. It is interesting to see EPCs being used as a marketing tool for landlords. The approach in this well written article may well yield dividends for the responsible and professional landlord looking for decent tenants who are planning to rent long term. However there are problems at the lower end of the private rental market where it is unlikely that the property in question will have an EPC, despite it being illegal to rent out a property without one.

    Why do I say this?
    Because in my development it is a fact that landlords couldn’t care less about the legalities involved in being a landlord. Properties are rented out without proper tenancy agreements, one is under a repossession order and the landlord continues to rent it out and others have foreign tenants who wouldn’t even know to ask about an EPC!

    In enforcement terms, having contacted Trading Standards out of curiosity I was advised they could only act on a confirmed report which basically meant that unless the tenant contacted them there was nothing they could do. They did not carry out checks ‘on spec’.

    EPCs is just the latest in a long list of non-compliance we experience here so any suggestions?

    Miss Sharon Crossland AIRPM
    Leasehold Life

  2. The vast majority of the EPCs I do are for rental property. I have a few good clients with a large portfolio of properties but the majority of ‘buy to let’ Landlords know nothing about EPCs and I expend effort in phone calls and letters explaining the LEGAL responsibilites they have re the EPC. I can see no Government (National or Local) informing the public (especially prospective Tenants) about EPCs and my local Trading Standards Officers are too overworked/under resourced to take up any cases of non-compliance. I could legitimately report some Landlords I speak to, but I’m not a ‘grass. – & it wouldn’t do my business any good.

    Landlords see it as an extra expense they try to avoid and Tenants (many who are on income support) don’t care about energy efficiency as their bills are paid by the state. How about the DHSS not paying Income Support and other benefits etc unless a valid EPC is presented for the applicant’s property?

  3. Interesting article, i never thought of this being that useful but your right. From my own experience, some professional tenants that have rented a house have also shown a significant interest in the EPC as appose to students or job seekers

  4. The UK housing market has been boosted by the abolition of Home Information Packs (Hips), according to Agency Express the largest ‘For Sale’ board contractor in the UK.

  5. It’s going to be interesting when the Green Deal comes in because you won’t be able to rent properties that don’t have a modified EPC maybe as early as 2014.

  6. It will be very interesting to see the impact of the Green Deal on the rented sector. From my own experience students have a lot to gain from renting properties with a good EPC rating.

  7. Great article, EPC rating will have a greater impact in the letting sector!

  8. Great article, it will be interesting to see how the Green Deal scheme takes off

  9. With the Green Deal coming those new reports will highlight potential improvements that could qualify too, I would think most landlords would jump at the chance of getting the measures installed under Green Deal and further increasing the rentability (new word?) of their property…

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