In 2011 the government enacted new energy efficiency standards for properties being rented out by landlords in England and Wales. This legislation makes it illegal for landlords to rent out properties without a suitable level of energy efficiency, rules that come into full effect on April 1, 2018.
In order to comply with these new regulations, landlords must acquire an Energy Performance Certificate or EPC for their properties. Properties rated ‘F’ or ‘G’ will require upgrades to at least an ‘E’ in order to be rented out after April 1st of 2018.
Starting April 2016 landlords may not refuse a tenant’s request to upgrade the energy efficiency of an ‘F’ or ‘G’ property to at least a level ‘E’. Should the landlord not comply with the tenant request penalties could be due and payable under the new act.
Landlords hoping for a delay in the implementation of the regulations will be disappointed with the Energy Climate Secretary making it clear this legislation is a centrepiece of the governments efficiency agenda saying, “…if you do not improve your property to the minimum EPC, E rating by three years’ time, you will not be able to let out that property. Which is quite a big stick, it is about time too…”
Do I need to Make Improvements?
If you are a landlord and own a property that is amongst the 335,000 homes in England or Wales that are let out and fall below the minimum standard ‘E’ level EPC you will need to make improvements to continue to let that property out to tenants. Existing tenants on a contract can stay past the deadline, but they cannot renew and will be forced to move out at the end of the contract if improvements are not made.
As a landlord that owns a ‘F’ or ‘G’ rated property, you will also have to make improvements before the deadline, if within the two year period before April 1, 2018, the tenant requests such efficiency improvements.
Does Industry Support the Change?
The National Landlords Association, and its CEO Richard Lambert have indicated their support for the measures, saying the government, “…has struck a delicate balance between making clear what is expected and ensuring that there is a realistic prospect for landlords to comply…”
This support extends to the UK Green Building coalition, who has pointed out there are numerous schemes available in the form of the ECO and Green Deal programs to help cover upfront conversion costs. Landlords that include the cost of heating in their rental contracts stand to save a considerable sum on their heating.
How Are Tenants Impacted?
Tenants will benefit from the legislation by being able to live in a more energy efficient home. This will lead to the average tenant in an ‘F’ or ‘G’ property saving an additional £1000 per year on their heating and energy bills with more than 1 million tenants likely to see such a reduction because of upgrades. Reduced draughts and improved warmth will improve comfort and quality of living within the premises, making both heating and cooling easier.