Around two-thirds of buy-to-let landlords lack awareness of new energy standards that come into effect in April 2018, according to research by energy giant E.on. It can be hard to keep up when there is so much change, but the effective ending of the Green Deal (remember that?) meant that changes had to be made to the Regulations imposing minimum energy efficiency standards in the private rental sector.
At the time of writing, the small print of the Regulations has not yet been finalised, but the deadline dates are fixed for April 2018 and April 2020. Under the 2015 Energy Efficiency Regulations, a civil penalty of up to £4,000 will be imposed for breaches.
April 2018:For new lets and renewals of tenancies, rental properties will need to have an energy performance rating of E or better.
April 2020: The regulations will come into force for all existing tenancies .
You may have an idea of how to improve energy performance ahead of the deadline – many EPC providers will have already offered suggestions for cost-effective ways to improve the energy rating for a property; for example, changing the light bulbs to energy efficient options, installing double glazing or insulation.
There are already separate regulations, which became effective from 1st April 2016, under which a tenant can apply for consent to carry out energy efficiency improvements in privately rented properties. Here, it was the responsibility of the tenants to ensure that the works are funded and the intention is that no upfront costs should fall on the landlord.
That will change. Under the 2018 regulations it will be your financial and legal responsibility to bring properties up to the minimum E standard as part of the “able-to-pay” sector. However, offers and schemes to reduce the costs are expected to emerge.
Update on EPCs
It seems that the government has been listening to concerns about Energy Performance Certificates (EPCs) and will recalibrate them, but only for older solid-wall properties.
This is because research has shown that EPCs understate the thermal efficiency of the solid walls of many older (usually pre-1918) properties.
The proposed recalibration of EPCs could mean that some solid wall properties currently rated F under an EPC will no longer require any work, and that less work may be required in the case of a current-G rated property. So, landlords of F and G rated solid wall properties may want to wait and see how the regulation develops.
Do remember that self-contained flats (i.e. behind its own front door with its own kitchen/bathroom facilities) require one EPC per flat.
The biggest influencer when calculating the EPC of a property is its heating system; so your boilers, heaters, controls and valves may be the best place to start when it comes to improvements. We’ll look at that in a future blog.