Landlord News

Energy Performance Ratings: The Changes You Need to Know About

Rose - June 22, 2017

Due to overwhelming evidence that properties in the United Kingdom are falling behind other nations in terms of their energy efficiency, the Government has imposed new regulations that will come into effect from April 2018.

From this date, any properties in England and Wales rented in the private sector must have a minimum energy performance rating of E. This must be validated by an Energy Performance Certificate (EPC) that was conducted no more than ten years previously.

The new regulations will be applicable to new lets and tenancy renewals from the aforementioned date. However, properties with existing tenancies will be given until April 2020 before the new regulations come into fruition.

The buildings that will be required to comply with the new regulations include: a privately rented domestic property that has an EPC; or a property space within a larger unit, which is required to hold a valid EPC.

Energy Performance Ratings: The Changes You Need to Know About

Energy Performance Ratings: The Changes You Need to Know About

Buildings that will not be required to comply with the new regulations include: residential properties that are vacant for eight or more months of the year; temporary buildings that will stand for two years or less; buildings considered architecturally significant whose appearance would be significantly altered by energy efficiency upgrades; and free-standing buildings with a total floor area of less than 50 square metres.

Should any applicable property fail to meet the new regulations by the aforementioned dates and hold an F or G rating on the EPC scale, tenants will not be allowed to rent the property. Consequentially, this means landlords will have to source EPCs for commercial properties they own and intend to lease. Improvements in the property’s energy efficiency will need to be carried out immediately in order to improve its EPC rating. If tenants enter a property that holds an F or G EPC rating, the landlord will could be forced to pay considerable financial penalties, exemptions withstanding.

Situations that may qualify for penalty exemptions include:

  • Buildings that have undertaken cost-effective improvements but still fall below an E rating.
  • Landlords that require and have been subsequently denied permission from third party owners to make energy efficiency improvements.
  • Occupying tenants withhold consent for energy efficiency improvements.
  • Landlords have written evidence from a qualified installer suggesting that improvements will be detrimental to the structure of the property.

Any exemptions will need to be logged with the Government-run PRS Register. Exemption applications can be submitted from October 2017 and, if approved, will last for five years from the date of confirmation.

Penalties for false exemption submission or failure to comply with new regulations are categorised as follows:

  • £1,000 penalty for providing false information to the PRS Exemptions Register.
  • £2,000 penalty for failure to comply with notices from local authorities.
  • £3,000 penalty for less than three months of renting a property that does not comply with new energy efficiency regulations.
  • £4,000 penalty for more than three months of renting a property that does not comply with new energy efficiency regulations.

There are a number of changes that a landlord can implement to ensure that their property complies with the new regulations by April 2018.

Firstly, a landlord should be fully aware as to what EPC rating the property currently holds. All tenancy agreements should also be updated to include the new regulations.

Any works that may need undertaking at properties should be conducted as soon as possible. Property maintenance professionals will all be aware of the new regulations and, the closer April 2018 gets, the higher their prices are likely to be.

Check that loft and cavity wall insulation meets required standards. This can have a large impact on your EPC rating and can be improved with funding, if the insulation is under a certain depth measurement.

Ensure that the boiler and central heating system is of optimum standard. An underperforming system could have a seriously negative impact on your EPC rating.

Simple considerations such as changing any halogen lightbulbs with energy-saving bulbs, or ensuring your windows are double or triple glazed will increase your property’s chances of falling above an E on the EPC scale.

Perhaps even consider renewable technologies, such as solar panels. While this may be an expensive venture, this is actually a long-term investment, which will all but guarantee that your property meets new regulations.

We’d like to thank www.epcforyou.co.uk for this insight.