The cost cap: you will never be required to spend more than £3,500 (including VAT) on energy efficiency improvements.
If you cannot improve your property to EPC E for £3,500 or less, you should make all the improvements which can be made up to that amount, then register an ‘all improvements made' exemption.
There are 3 ways to fund the improvements to your property:
Option 1: Third party funding
If you are able to secure third-party funding to cover the full cost of improving your property to EPC E, you can use this and you don't need to invest your own funding:
- the cost cap does not apply
- you should make use of all the funding you secure to get your property to band E, or if possible higher.
Funding can include:
Option 2: Combination of third-party funding and self-funding
If you can secure third-party funding but it is:
- less than £3,500, and
- not enough to improve your property to EPC E
you may need to top up with your own funds to the value of the cost cap.
You can count any energy efficiency investment made to your property since 1 October 2017 within the cost cap and if your property can be improved to E for less than the cost cap, that is all you need to spend.
Option 3: Self funding
If you are unable to secure any funding, you need to use your own funds to improve your property. You will never need to spend more than the cost cap.
You do not need to spend up to £3,500 if your property can be improved to EPC E for less. If you can improve your property to E for less than the cap, you will have met your obligation.
If it would cost more than £3,500 to improve your property to E, you should install all recommended measures that can be installed within that amount, then register an exemption.
If you have made any energy efficiency improvements to your property since 1 October 2017, you can include the cost of those improvements within the £3,500 cost cap.
