EPC update: Landlords incoming energy efficiency rules for rental properties

Richard Pulford, Senior Associate in the Dispute Resolution team, looks at the minimum energy standards in light of Labour’s commitment to energy efficiency in residential properties. 

 

Following the Renter’s Rights Bill recently released, Labour have wasted no time in introducing more of their housing strategy. It has long been known that the intent was that the Minimum Energy Efficiency Standards (MEES) imposed in April 2018 requiring a minimum EPC score of an ‘E’ was for this to be a stepping stone for more lofty goals. This has been delayed multiple times when the impact, cost, and logistics of this implementation were properly reviewed and considered but with the Labour Government, it appears that this is very much on the agenda again.

At the Labour Party Conference, Ed Miliband has committed to starting the consultation process to increase the minimum standards to a ‘C’ rating by 2030. We therefore need to consider what this would mean for the housing stock and what landlords should be doing moving forwards.

 

Landlords EPC requirements currently

As mentioned above, currently unless one of the approved exceptions applies, Landlords are not able to let out their properties unless the property meets the minimum energy efficiency standard of an E. Any new letting or marketing requires an up to date EPC which will include not only the current energy efficiency but also the highest achievable rating. Landlords have a duty to ensure that to where possible increase the efficiency and if this is not possible, ensure that the exemption that specifically applies is correct and registered. Failure to do so can result in amongst other things, fines of up to £5,000.

 

What this commitment means

With many properties already struggling to reach the aforementioned ‘E’ standard, would the imposing of a higher standard than that remove yet more properties from the rental market all together? Considering the age of a lot of properties that are rented out in the Private Rental Sector, will the current exemptions regarding high costs be re-evaluated given the increase in works needed or will there be encouragement to freeholders to provide consent for alterations to increase the energy efficiency (or potentially more steps for the leaseholder to go through to prove they have suitably requested consent)?

Diligent Landlords, knowing that this next step was an inevitability, may have already started to move towards an C Rating with incremental increases and as such will be in a better position than those who assumed this day may never come. At the moment we do not know for sure. There will surely be caveats and sources of funding available to make a scheme like this work and so monitoring how the consultation progresses will be interesting reading. What appears to be clear is that energy efficiency is back on the agenda and Landlords will need to take notice.

 

Need advice on tenancy issues?

With the ever-increasing obligations being imposed on landlords and managing agents, if any guidance or advice is required, we would be happy to help. You can contact our dispute resolution team, or alternatively, read further on the residential property and property disputes services at Boyes Turner.