Graphic of an Energy Performance Certificate efficiency rating arrows hovering in the air against a white background

Categories: epc | government and politics

Energy Performance Certificates are being replaced by the new Home Energy Model, set for April 2025. We take a look at the impact on landlords and property investors.

The ‘Home Energy Model’ (HEM) will have new assessment criteria, aimed at more accurately reflecting the energy efficiency of the home it’s considering.

How HEM assessments differ from EPCs

The Home Energy Model focuses on energy efficiency, with a greater emphasis on carbon emissions. It promises more accurate assessments of a property and moves away from looking at gas heating as a measure of heating efficiency now that heat pumps and other ‘green’ solutions are being implemented in homes.

One of the most significant departures from the existing Standard Assessment Procedure (SAP) methodology is the level of detail required by the HEM.

With inputs ranging from specific household appliance ratings to insulation specifications and dwelling volume, the HEM offers a far more granular analysis of a property's energy performance.

This enhanced precision extends to heat loss calculations, with users tasked with providing detailed information on building elements to improve accuracy.

Steps have also been taken to emphasise transparency, as the source code for the HEM methodology has been published. Particularly savvy property investors may glean insight from this, and infer exactly what needs to be done to their home in order to improve its energy efficiency without making excess changes.

What will happen to EPC’s within their expiry period?

No clarification has been given on existing EPC certificates and whether those that expire after the HEM assessment comes in will have to be reassessed.

The new HEM is still being consulted on by the government, but assessors have said they are already training for the new system.

How much will a HEM assessment cost landlords?

For the typical three-bed house, property investors can anticipate a roughly £65 charge for a 30-40 minute assessment. However, HEM is still going through government, and so this may all change.

However the cost of works to achieve a good rating could be significant, just as hitting higher EPC ratings could have been.

Comments from industry

The NRLA has said:

The NRLA backs the overall principles to decarbonise heating and is pleased a new system, less reliant on assumptions, is likely to be more accurate.

However, it does have concerns about the increased time it will take to carry out inspections, and the knock-on impact on landlords’ costs – at a time when landlords are under more financial pressures than ever.

Commercial Trust will be following this story and will keep our readers and clients updated on further detail as it becomes available.

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