by Richard Truman, Head of Operations at Simple Landlord Insurance
What are the new rules?
The new rules will come into force on 1 April 2018. Landlords with properties that have an Energy Performance Certificate (EPC) rating of For G won’t be able to sign new tenancy agreements – with new tenants or existing ones.
It’s thought that could affect around 300,000 properties, and landlords who don’t comply could be fined up £4,000 fine.
Who’s affected?
Private domestic rental properties in England and Wales. The law doesn’t apply to Scotland or Northern Ireland.
I don’t know what my rating is!
Landlords have been required to have a certificate in order to be able to market their property since 2013. But if you don’t know or can’t find it, you can search here for a copy using the property’s postcode.
If you think you need a new certificate, you should find an accredited Domestic Energy Assessor. A link to a Government website which lists formally approved assessors can be found here.
What should I do if my property has a low rating?
It’s time to try and improve your rating. That might include investing in things like loft and wall insulation, LED lighting, and updating old boilers and appliances.
It may be that your property is exempt – see below.
But whatever you do, don’t just ignore it.
From 1 April 2020 all domestic private rental properties must be at a minimum of EPC band E, whether a new lease is being signed or not.
What are the exemptions to the rules?
Your property might be exempt if it’s a listed building, or if it’s hard to treat or improve for structural reasons. If all improvements have been made and the property still remains below an EPC rating of E, the building might also be able to be registered as exempt.
Remember, MEES does not apply to lettings of six months or less, or to lettings of 99 years or more.
According to the new rules, exemptions must be registered on the Private Rented Sector (PRS) Exemptions Register, details of which can be found here.
What’s the point?
The MEES rules are designed to tackle the least energy-efficient properties and promote energy efficiency measures to support a better living environment and lower energy bills.
A property with a better EPC rating should be more attractive to tenants, because it will be cheaper to live in. In fact government research shows that rental properties with higher EPC ratings actually have less void periods (31%) than those with lower ratings.
How will the regulations be enforced?
Local authorities will check whether properties meet the minimum standards, and they can issue a compliance notice if they suspect a property might be sub-standard. They can issue penalties of up to £4,000.
Even more expensive, though, is the risk of void periods. If you can’t legally let your property, you can’t make money from it.
What about the ‘Green Deal’?
The Green Deal is a way landlords can make energy saving improvements without paying up front. Instead, loans are repaid through electricity bills. Just remember that if the tenant pays the bills, you’ll need their permission before you can take out a Green Deal.
More Green Deal information can be found here.
What should landlords be doing?
Take action now! More information on the new guidelines can be found here in the Private Rented Landlord Guidance.
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Richard Truman