If I can't get my property to an EPC C due to it being listed or some other genuine issue, what are the exemption rules for landlords, and how do I apply for one? What if the works cost too much?
Quick Answer
Landlords can apply for exemptions from EPC C requirements if a property is listed, or if the cost of improvements is excessive, such as exceeding £3,500 or £5,000 for specific measures. Exemptions must be registered on the PRS Exemptions Register with supporting evidence.
## Understanding EPC Exemptions for Rental Properties
From April 2025, the minimum EPC rating for new tenancies is E, with proposals moving to C by 2030. If your rental property cannot meet the required EPC rating due to specific circumstances, there are several exemption categories available to landlords. These exemptions prevent landlords from being forced to undertake unnecessary or disproportionately expensive works that do not provide adequate return on investment or are impractical. The primary exemptions are for high cost, listed buildings, and where third-party consent cannot be obtained. These are not automatic; landlords must apply and provide evidence to register an exemption on the national Private Rented Sector (PRS) Exemptions Register.
### How Do EPC Exemptions Work?
If a landlord determines their property is eligible for an exemption, they must register it on the PRS Exemptions Register. This involves selecting the correct exemption type, providing evidence, and ensuring the application is complete. Examples of evidence include written confirmation from a qualified expert, such as for the 'all improvements made' or 'relevant improvements are not appropriate' exemptions. Exemptions are typically valid for five years, after which a landlord must reassess the property's EPC and decide if new improvements can be made or if a new exemption can be registered. The register ensures compliance is tracked, and landlords are not penalised for valid inability to meet the standards.
## Specific EPC Exemption Categories
### High Cost Exemption
This exemption applies if the cost of making even the cheapest recommended energy efficiency improvement to the property would exceed a 'cost cap'. The current cost cap is a cumulative amount of £3,500 including VAT. This means if you have already spent money on energy efficiency improvements, that amount counts towards the cap. Additionally, a specific measure exemption exists where the cost of a single recommended energy efficiency measure, such as solid wall insulation, is more than £5,000 to install. Evidence for this typically requires three quotes from different installers, demonstrating that the cost exceeds the threshold. For example, if a property's EPC assessment recommends installing loft insulation at £1,000 and solid wall insulation at £6,000, and the property is currently an F, the landlord could register a High Cost Exemption for the solid wall insulation, as its individual cost exceeds £5,000. Landlords must demonstrate that all cost-effective improvements up to the £3,500 cap have been made, or that no improvement can be made within the cost cap.
### All Improvements Made Exemption
If an EPC assessment recommends various improvements, and you have installed all of them, but the property still does not reach the minimum EPC rating, you can apply for this exemption. This demonstrates that all reasonably possible measures have been undertaken. For instance, a property originally rated G might have had all recommended measures installed, costing £3,000, but still only reach an E rating. Since no further cost-effective measures are available, this exemption can be registered. This exemption acknowledges that some properties, even with investment, cannot achieve higher ratings.
### Wall Insulation Exemption
This exemption applies where the most recommended energy efficiency improvement is cavity wall insulation, external wall insulation, or internal wall insulation, but a qualified expert (such as an architect or building surveyor) advises it would not be appropriate for the property. This could be due to structural instability, potential damage to the fabric of the building, or other adverse effects. For example, a property with delicate decorative plasterwork might be materially damaged by internal wall insulation without significant and disproportionate remedial cost. The expert's written report serves as the necessary evidence for registration.
### Listed Building and Conservation Area Exemption
Properties that are officially listed or located within a conservation area may be exempt if compliance with EPC requirements would unacceptably alter their character or appearance. This is not an automatic exemption; a landlord must seek advice from the local planning authority's conservation officer. They will confirm in writing if the recommended energy efficiency improvements are deemed to detrimentally affect the property's special architectural or historical interest. For example, installing modern double glazing in a historic listed building, replacing single-pane sash windows from the 18th century, would often be considered an unacceptable alteration. This written confirmation is then used to register this specific exemption.
### Third-Party Consent Exemption
This exemption arises when necessary energy efficiency improvements require consent from a third party that cannot be obtained. This could include freeholders, superior landlords, or even planning authorities for certain exterior alterations. For example, if upgrading windows to improve energy efficiency requires freeholder consent, and this is reasonably refused, the landlord can register this exemption providing evidence of the request and refusal. Similarly, if planning permission for external insulation is denied, this would also fall under third-party consent. Evidence would be the written requests for consent and the subsequent refusals.
## How to Apply for an Exemption
All applications for EPC exemptions are made via the Private Rented Sector (PRS) Exemptions Register, which is an online government portal. Landlords must create an account and then follow the steps to register a new exemption. This process requires selecting the appropriate exemption category, accurately completing the required information about the property, and uploading all necessary supporting evidence. For instance, registering a High Cost Exemption would typically require copies of three quotes for the recommended works or proof of expenditure up to the £3,500 cap. Similarly, for a Listed Building Exemption, the official letter from the local planning authority. The system guides the user through the required evidence for each exemption type. It's crucial to retain all original documentation, as false or misleading information can lead to penalties.
## Investor Rule of Thumb
Always assume you must meet the EPC requirements unless you have clear, documented evidence and have successfully registered a valid exemption; otherwise, you risk non-compliance and potential penalties.
## What This Means For You
Understanding EPC exemptions is vital for protecting your property portfolio's profitability, especially with proposed changes to a C rating by 2030 affecting potential buy-to-let investment returns. Most landlords don't lose money because they ignore EPCs, they lose money because they assume exemptions will be automatic or easy. If you want to understand these regulations and their impact on your specific properties and landlord profit margins, this is exactly what we unpick inside Property Legacy Education.
Steven's Take
The EPC regulations are a classic area where proactive management saves significant costs. Don't wait until you're trying to re-let a property to find out you need an exemption or expensive works. If you have a property that is listed or has an unusually high EPC cost, start gathering your evidence now. Whether it's three quotes showing the £3,500 or £5,000 threshold being breached, or a written opinion from a conservation officer, having this paperwork in hand is crucial. Registering an exemption on the PRS Exemptions Register is relatively straightforward, but the preparation of evidence takes time. This is not something to rush.
What You Can Do Next
Review current EPC: Obtain a current EPC for your property if you don't have one to identify what rating you have and what improvements are recommended. Search for an accredited assessor via epcregister.com.
Assess improvement costs: Obtain at least three quotes for all recommended energy efficiency improvements. If total costs exceed £3,500 (or £5,000 for a specific measure), you may be eligible for a High Cost Exemption.
Consult local authority (for listed buildings/conservation areas): Contact your local planning authority's conservation officer for a written opinion on whether EPC improvements would unacceptably alter the property's character. Find their contact details on your council's website.
Gather evidence: Collect all necessary documentation, such as quotes, expert opinions, or correspondence with third parties, to support your chosen exemption category.
Register exemption: Apply for the appropriate exemption category on the Private Rented Sector (PRS) Exemptions Register via the GOV.UK website (gov.uk/register-an-epc-exemption).
Seek professional advice: For complex cases, consult an experienced property solicitor or energy consultant to ensure correct application and compliance. Search for 'property solicitor' on The Law Society (lawsociety.org.uk) or 'energy consultant' on gov.uk/find-energy-certificate.
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