Starting from the 1st April 2018 new Minimum Energy Efficiency Standards (MEES) come into force in England and Wales. Despite this, Landlord Today reports that over 400,000 properties are still failing to meet current energy performance standards passed in 2015. It is therefore important that landlords assess their current property to ensure that they are compliant, and if not make suitable changes to the property.
What do the new standards mean?
As a result of the regulation, landlords will be breaking the law if they grant a new lease on properties with an Energy Performance Certificate (EPC) rating below E.
These requirements will apply to all private rented properties in England and Wales, and will still apply even when there has been no change in tenancy arrangements.
The Government Department for Business, Energy and Industrial Strategy states:
“EPC F and G rated properties waste energy. They impose unnecessary cost on tenants and the wider economy, and they contribute to avoidable greenhouse gas emissions. Increasing the energy efficiency of our domestic rental stock can help:
- Manage the energy costs of tenants, including some of the most vulnerable;
- Improve the condition of properties and help reduce maintenance costs;
- Smooth seasonal peaks in energy demand, and thereby increase our energy security;
- Reduce greenhouse gas emissions at relatively low cost.
The Regulations are intended to ensure that those tenants who most need more efficient homes, particularly vulnerable people, are able to enjoy a much better living environment and lower energy bills.”
They also note that a report published in 2016 by Sustainable Homes on social housing found that improving the energy efficiency of rental housing also positively impacted on landlords by reducing rental arrears and voids. For example, it was found that cold homes, on average each year, had two more weeks of rent arrears when compared to more efficient homes. In addition, as homes become more efficient void periods are also reduced, with 31% less voids in band B properties when compared with that of E or F.
The new standards are therefore mutually beneficial for both landlords and tenants.
Read the published Government guidance in full here.
Failure to comply
If a landlord is found to be letting out a property with a sub-standard EPC rating they will be in breach of the regulation and risk prosecution, enforced by local authorities.
Where a landlord has let a sub-standard property for a period of less than 3 months then the local authority is able to impose a fine of up to £2,000. If in breach of the regulations for more than 3 months then a financial penalty of up to £4,000 can be served. This can also include a publication penalty, where details of a landlords breach may be published.
Failure to reach Minimum Energy Efficiency Standards could also lead to loss of rent for landlords who are unable to let out properties in their current state.
How can I comply as a landlord?
For many landlords, only small changes to their property may be needed to ensure that they meet standards. A report published by Parity Projects for the UK Green Building Council suggests that the energy efficiency of a property can often be improved for £2,500 or less.
By taking measures such as improving insulation within the property, including the roof, installing low-energy LED lighting, replacing old single glazed windows with double glazing, and replacing inefficient boilers can all help to increase your EPC rating.
Landlords should, therefore, ensure that their properties meet the correct standards sooner rather than later to avoid non-compliance and imposed fines.
You can find further information in the Government ‘domestic landlord guidance’ document here.