A new law comes into force on 1st April which affects any property in England and Wales found to have an Energy Performance Certificate (EPC) rating below E. Read on to see if your rental property could be affected.
In a nutshell, from this Sunday it will become unlawful to grant new tenancies or leases on residential or commercial properties with an EPC rating of F or G. Therefore, all landlords and property owners must ensure their property complies with the MEES before a new lease or tenancy is created. Typically, this will entail making improvements to the building to improve the energy efficiency to an E rating or above
For those who fall foul of the new regulations the penalties could be high; for private landlords fines up to £5,000; and up to £150,000 for non-residential properties.
How many properties in UK will be affected?
According to the latest figures from the Office of National Statistics in 2017 alone, 64,092 property EPC ratings were designated below an E and some commentators estimate over a quarter of residential properties in total are currently E or below.
Why is this being enforced?
Primarily the MESS is designed to help achieve the UK’s legislative targets of reducing CO2 emissions for all building to near zero. Additionally, the new regulations are intended to ensure that those renters who most need more efficient homes, particularly vulnerable people, are able to enjoy a better living environment and lower bills. Properties with lower energy ratings result in higher tenant energy bills and an increased likelihood of living in ‘fuel poverty’.
Recent Government data shows that the average annual cost of energy for an EPC band G property is £2,860, and £2,180 for an F rated property whereas the average annual cost is £1,710 for an EPC band E property. Therefore, a tenant whose home is improved from EPC band G to band E could expect to see their costs reduced by £1,150 a year so long as there were no wider changes in their energy use.
Are there further changes planned?
Yes, this is just the start of a phased programme which will see eventually see the minimum standard upgraded:-
1 April 2020 – All domestic buildings requiring EPCs must achieve at least an E rating, even when a tenancy agreement is already in place and the property is occupied.
1 April 2023 – All non-domestic buildings requiring EPCs must achieve at least an E rating, even when a lease is already in place and the property is occupied.
**2025 onwards **– The minimum standard is likely to rise to a D rating by 2025 and a C rating by 2030.
Are landlords aware of these changes?
Worrying new research from Just Landlords has found widespread ignorance to the new regulations; for example, 78% of those asked said they would not like the property they own or rent to have its EPC rating improved and 80% did not know that an EPC could be a clear indication of the environmental impact a property is having.
I don’t want to be left in the dark – how can I check my EPC?
The good news is that an Energy Performance Certificate (EPC) is valid for 10 years. If, however, you’re concerned you’re EPC is out-of-date or missing, you can search for a PDF copy using this handy Government link.
And if you want to book a new EPC survey by an accredited Domestic Energy Assessor you can search from this useful national register here or book an inspection within a week via HomeRenter’s preferred supplier here.