Property EPC rated F or G?

Monday, September 4, 2017

Energy efficiency of rental properties may not be top of tenants must-have-list, but awareness is increasing as tenants start to pay attention to poor EPC reports and the advent of applications such as Zoopla’s running costs which highlights the energy costs of rental property.  This week we take a look at the looming Minimum Energy Efficiency Standard Regulations and what they mean for you.  So read our five daily tips to find out more or contact us to disucss your property on 02076226412.

Tip 1:  The Minimum Energy Efficiency Standard Regulations mean that it will be illegal to let property with an energy efficiency rating of F and G.  This applies to new lets and renewals, including statutory periodic tenancies created at the end of a fixed term shorthold tenancy, and will apply to existing tenancies from 1st April 2020.  The regulations apply to domestic private rented sector properties which have an EPC or are required to have an EPC (this includes units that are not required to have an EPC but are within a larger unit which itself is required to have an EPC either at point of sale of point of let.)

Tip 2:  The Minimum Energy Efficiency Standard Regulations are due to come into force from April next year.  According to the RLA, the government has confirmed that the Regulations WILL be brought in next April.  This is in spite of the removal of the Green Deal, a funding mechanism for landlords wanting to improve the energy efficiency of their property. The government is expected to publish specific guidance for landlords in October to clarify the new rules and their obligations.  With Green Deal finance no longer available the Government is now expected to confirm a cap on the amount of money that landlords must spend on improvements, with an initial figure of £5,000 proposed.

Tip 3:  According to the regulations, a civil penalty of up to £4,000 can be imposed for breaches.  When the regulations were drafted, there were a number of exemptions.  In particular, only appropriate, permissible and cost-effective improvements were required. (Cost-effective measures are those improvements that are capable of being installed within the Green Deal's Golden Rule which ensures that landlords don’t have upfront or net costs for the improvement works.)  According to the RLA the scope of this exemption is under review and may be replaced by a cost cap.  So landlords are exempt if they are have already undertaken the cost effective improvements but remain below an E rating, they are unable to access funding due to failing the relevant credit checks, a third party or the tenant does not give consent for the works, works required would cause a capital devaluation of the property of more than 5% (must be evidenced) and lastly if wall insulation is required and would have a negative impact on the fabric or structure of the property.

Tip 4:  The RLA also reports that Government has confirmed that listed buildings will be exempt, on condition that landlords have done as much as they are permitted to, to make them energy efficient. Landlords will need to register their properties online.  More specific guidance is available from the RLA or by consulting your local planning authority on whether the required alterations would obtain listed building consent.  If a listed building is exempt from the need to have an EPC in the first place, it would be exempt on these grounds alone. 

Tip 5:  If improvement works are required it is up to the landlord to choose which works need to be carried out subject to them achieving the required improvement.  The EPC certificate may suggest some works improvement works but many more possible improvement works could be required and include any energy efficiency improvement work which qualified for Green Deal and the installation of gas for an off-gas property so long as the mains are within 23 meters from the property.  

Do you have a property that requires improvements, or would you like to discuss improvements to your property that already has an E rating or above.  We are always happy to discuss your rental property and know what tenants look for when viewing a property.  From the latest thermostat to good quality glazing, we can help you make sure your property stands out from the rest.  

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