From 1 April 2018, new laws came into play concerning how energy efficient a privately rented property is. Private rented properties now need to have an energy efficiency rating of at least an E on their Energy Performance Certificate (EPC). This new law is part of the new Minimum Energy Efficiency Standard (MEES). Further legislation due over the next five years.
The government has also consulted on whether it should raise the minimum requirements for properties to an EPC rating of C by 2030. It’s clear that property is a big part of its plan to tackle climate change, and reduce total carbon emissions by 80% by 2050.
All private landlords should understand the new law and get ahead of any further changes. Here, we explain the regulation and talk about how to boost your property’s energy efficiency rating.
What’s an EPC?
If you want to let a residential property, it must have an EPC. Valid for 10 years, this certificate shows more information about the property’s energy usage. It also includes typical running costs and advice about how to make the property more energy efficient.
An EPC will rate a property from A (most efficient) to G (least efficient). The law says that the landlord needs to supply tenants with a valid EPC before they move in. If this isn’t done, you won’t be able to serve a Section 21 notice to evict tenants if you need to regain possession.
What are the changes?
From 1 April 2018, if your rental property was rated F or lower, you won’t be able to let or renew a lease. This goes for both commercial and residential property.
Right now, the law only applies if you’re granting a new tenancy. From 1st April 2020, the regulations will apply to all privately rented property which are required to have an EPC. If you don’t follow the law, you risk fines of up to £5,000 per property.
Are there any exemptions?
There are some situations where a landlord might qualify for an exemption, these include:
- If a landlord has made all ‘relevant energy efficiency improvements’ but the property still falls below an E rating
- The cost to a landlord for putting in new insulation and other measures is higher than £3,500
- If the landlord needs consent from the tenants but this is withheld. This only applies until the tenancy ends, or after 5 years
- The individual has only recently become the landlord for the property (although this is only valid for 6 months)Third party consent is needed for the requested improvements, but this cannot be obtained (e.g. consent from mortgage lender)
- An independent surveyor concludes that the steps needed to improve the property are expected to cause a capital devaluation of the property of more than 5%
- The landlord has obtained a written opinion from a suitably qualified person advising that an improvement isn’t appropriate due to its potential negative impact on the fabric or structure of the property. This only applies to wall insulation.
If any of the above relate to your property, you need to apply to be listed on the PRS Exemptions Register.
How do the improvements work?
You could get some help via the Energy Company Obligation (ECO) if your tenant is receiving benefits. Under the ECO, medium and larger energy suppliers fund the installation of energy efficiency measures in British households. The current initiative focuses on helping people on lower incomes, considered to be in vulnerable situations or living in fuel poverty. These suppliers work with installers to introduce certain energy efficient measures, such as loft or wall insulation, or heating measures.
Although the ECO covers the whole of the UK, the grants and loans available differ according to country. If you’re not sure where to start, the Energy Saving Trust have provided some useful information here. Local authorities also offer initiatives to help with the cost of energy efficiency improvements.
What improvements should I make?
There are lots of things you can do to improve how energy efficient your property is, including:
- Installing double glazing: secondary glazing is often one of the most effective ways to boost your score; it can add between five and 10 points to your rating.
- Adding insulation: one of the more cost-effective ways to improve your rating as material is so inexpensive.
- Replacing the boiler: a condensing boiler could add as many as 40 points to your property’s score.
- Introducing heating controls: new technology may help your tenants to better control the way they heat the property and save money on bills.
- Changing light bulbs: although this will only make a small different to your overall score, replacing all bulbs for LED ones might just get you the remaining points you need.
Before making any changes, take a look at your EPC rating for advice and ask an expert for more guidance.
Find a local property expert
Energy efficiency is one of the many areas regulated by government. There are over 145 laws and 400 regulations that need to be followed to legally let a property in England and Wales.
If you’re looking at letting your property and aren’t sure where to start, talk to our expert lettings team in branch today.