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The new Minimum Energy Efficiency Standards: what do they mean for private landlords?

POSTED ON 26 JULY 2017

Coming into effect as soon as 1st April 2018, landlords will be expected to understand the details and implications behind the new MEES within the private rented sector

Private rented accommodation is just that – privately rented, independently from a private landlord – which is why assurance that the property the prospective tenant is moving into is performing efficiently is so important, and this very much includes the performance of energy efficiency. If the property has a low energy efficiency performance, it doesn’t just mean unwanted carbon emissions, it also means higher-than-necessary energy bills. According to Mike Feely, energy efficiency expert at E.ON: “Government housing data already shows that the private rented sector has the highest proportion of properties falling in the F and G bands.

Much is currently being done to get more people successfully onto the property ladder, and one way the government is attempting to do this has been by introducing the Energy Efficiency Regulations in 2015. These regulations outlined that from the 1st April 2016 a tenant would be allowed t reasonably ask for a ‘relevant energy efficiency improvement’ to the property. Such a request, however, could only be deemed ‘reasonable’ if the improvements would be wholly financed by the tenant (with or without financial help from the government). Of course, as the landlord you could finance the proposed energy efficiency improvement yourself if you wished, or partly contribute toward the costs.

However, the regulations have now become tightened. Minimum energy efficiency standards for England and Wales will take effect from 1st April 2018, making it unlawful for a private landlord to grant a new lease for their property if it has an energy performance certificate (EPC) rating below E (unless the property is officially registered as an exception). The new regulations will apply to new lets and renewals of tenancies and, for all existing tenancies, the regulations will take force from 1st April 2020. Breaching these standards will mean a civil penalty of up to £4,000.

Recent research has revealed that approximately two-thirds of buy-to-let landlords lack awareness of the new minimum energy efficiency standards. Almost half admit to being only ‘vaguely aware’ of the new rules, and around 27% of buy-to-let landlords do not know the EPC rating of their own property.

There is a potential penalty of 20% of the rateable value for properties breaching the regulations after three months so, needless to say, it is vital that as a landlord you gain awareness and sufficient understanding of these new regulations. Even though upgrading properties can be both time-consuming and costly, today there are a range of services available to help assist you throughout the whole process, such as online account management, value insulation and heating services, and even direct financial support may be available via the Energy Company Obligation.

 

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