This dissertation considers the government’s recent implementation of the Energy Performance Certificates (EPC’s) and its impact on the rental property market. A critical review of literature is included in chapter 2 of the dissertation. The review is structured into 11 different sections including; 1) Introduction, 2) Climate change, 3) Conventions and Protocols, 4) European Climate Change Programme, 5) Stern review, 6) Home Information Packs (HIP’s), 7) Energy Performance Certificates (EPC’s), 8) Political opinions, 9) Property professional opinions, 10) Display Energy Certificates (DEC’s), 11) Criticisms of DEC’s. The literature review highlights the key issues leading up to the implementation of the EPC as well as evaluating benefits and limitations.
Primary research was carried out with the aid of questionnaires as well as interviews. The questionnaires were used to obtain tenants views on EPC’s. The interviews were semi-structured and conducted with professional members of the rental property market. The results of the questionnaire demonstrated a general lack of awareness of EPC’s. The data collected from the interviews underlined key issues and concerns that had arisen with the introduction of EPC’s.
1.1 Background Information The fundamental purpose for the introduction of Energy Performance Certificates (EPC’s) across the UK is to reduce greenhouse gas emissions. In the 21st century the need to reduce climate change has become a high priority for many of the world leaders. Secretary General of the United Nations, Ban Ki-Moon speaking at the High-Level Event on climate change in 2007 states :
“Given the nature and magnitude of the challenge, national action alone is insufficient. No nation can address this challenge on its own. No region can insulate itself from these climate changes. That is why we need to confront climate change within a global framework, one that guarantees the highest level of international cooperation.” (Ban Ki-Moon, 2007) The European Union has introduced various measures in an attempt to meet the challenge of climate change. The Energy performance certificate is an initiative bought about from the European Energy Performance of Buildings Directive (EPBD). The Directive was published in January 2003 and the overall objective was to:
“promote the improvement of energy performance of buildings within the community taking into account outdoor climatic and local conditions, as well as indoor climate requirements and cost-effectiveness.” (DIAG, 2006) The European Union (EU) had agreed a total reduction of greenhouse gas emissions by 8% below 1990 levels during the first commitment period (2008-2012) of the Kyoto protocol. Therefore the EU launched a European Climate Change Programme (ECCP) in 2000. This was in order to establish a community strategy for the implementation of the Kyoto protocol which included the Energy Performance of Buildings Directive (EPBD).
Tackling the real threat of climate change and reducing the carbon foot print is a firm commitment for the UK. With ever rising costs especially fuel bills, the economic arguments in favour of energy efficiency are unavoidable for all the community. Buildings contribute almost 50% of the carbon emissions in the UK which is more than cars and planes. (Communties, 2007) The UK has approximately 26 million homes and the average home emits 6 million tonnes of CO2 annually. Statistics show that if everyone with gas central heating simply installed a new condensing boiler, carbon emissions would be cut by 13.7 million tonnes annually.
The savings on fuel bills would be approximately ï¿½1.6 billion and this could provide sufficient energy to heat a further 3.7million homes a year. (WWF, 2008) Furthermore as it is widely published the UK government has set a firm goal of cutting the carbon dioxide emissions. It plans to cut emissions by 60 per cent from the 1990 levels by 2050 and hopes to achieve real progress in reducing the emissions of between 50-75 million tons of carbon by 2020.
EPC’s have been introduced to provide the ratings for both energy efficiency and environmental impact (i.e. the amount of carbon dioxide being released into the environment.) of properties in the UK. An example of the ratings is below. A typical energy performance certificate Since 2008 legislation has made it mandatory for a seller and a landlord of a property to provide an EPC. Before an EPC can be provided an assessment of the property has to be undertaken by a Domestic Energy Assessor (DEA). Buyers and tenants can therefore now gauge the energy efficiency and the environmental impact of the property before they decide to purchase or rent.
EPC will provide them with a summary of the energy performance of the property in relation to features of, construction, heating and hot water as well as its environmental impact. It will also make a list of recommendations to improve the energy efficiency of the property. Buyers and tenants will now have detailed information of the property’s energy efficiency so that they can make a more informed decision before deciding to purchase or rent. It is also hoped that EPC will encourage sellers and landlords to make more positive changes to their properties so that they are more energy efficient and have less impact on the environment, therefore making them more saleable or rentable.