Energy Efficiency changes for landlords
As a landlord in England and Wales, there are changes to the energy efficiency regulations you need to know about and we’re here to help you get to grips with these.
- 1 April 2018 – New minimum standards of energy efficiency for private rented properties were introduced. From that date, landlords must make sure their properties have an Energy Performance Certificate (EPC) rating of E or higher before granting a new tenancy to both new or existing tenants.
- 1 April 2020 – Landlords will be prohibited from renting out all private rented properties (including existing tenancies) that don’t meet the minimum E rating.
- 1 April 2023 – Landlords will be prohibited from renting out non-domestic properties with an F or G rating.
What these changes mean for you
In a nutshell, you won’t be able to rent out properties that don’t meet the minimum E rating, unless it qualifies for an exemption.
The Energy Performance Certificate (EPC) provides details on the energy performance of the property and what you can do to improve it. An EPC is required for properties when constructed, sold or let - these are chargeable and certified and are valid for 10 years.
Under Government guidelines, a landlord with an F or G rated property will be expected to install energy efficiency improvements (either a single measure, or a combination of measures as appropriate) required to reach an EPC rating of E. A landlord remains free to make any improvements they wish to their property to ensure the property meets the minimum standard.
The EPC for your property should contain a recommendations report which should list any of the energy efficiency measures recommended for that property.
The domestic landlord guidance sets out information to help a landlord identify the improvements which can be made to an EPC F or G rated domestic property, to allow it to meet the minimum standard.
Landlords are currently only required to make improvements where funding is available to cover the full cost of purchasing and installing the improvements (See ‘What, if any, funding is available?’ below). Where funding is not available the landlord will not be required to make these improvements to the property. Please note however that, where a property cannot be improved to EPC E because recommended measures cannot be installed without cost, the landlord will still need to take steps to register an exemption on the national National PRS Exemptions Register (see ‘Does my F or G rated property qualify for an exemption?’ below).
Here are some examples of improvements and the points that could be gained, depending on the assessment of the property:
- Condensing boiler (47 points)
- Cavity insulation (13 points)
- Roof insulation (10 points)
- Cylinder stat & insulation (8 points)
- Double glazing (4 points)
- Low energy lighting (2 points)
For further information, please see Chapter 2 of the domestic landlord guidance.
You may be able to get some financial help from:
A Green Deal Plan:
The Green Deal enables homeowners and households to take out loans to pay for energy efficiency improvements, with repayments made through the energy bill.
Repayments for a Green Deal loan are made on a “Pay As You Save” (PAYS) basis. After the improvements have been made, the household begins to save energy and the bills are less than they would have been without the improvement, and these savings are used to repay the loan.
The Energy Company Obligation (ECO):
Obligated energy suppliers have carbon savings and heating bill savings targets which they are legally required to meet.
Properties in the domestic private rented sector will be eligible for energy efficiency measures under the ECO: Help to Heat scheme, both under the carbon saving obligation (CERO) element and the Affordable Warmth element, subject to the Affordable Warmth criteria.
For further information and criteria, please read the Energy Company Obligation page on the government website.
The government, local authority or third party:
The government, energy suppliers and local authorities all provide grants to help implement energy saving measures.
You can contact your local council or use an Energy Grants Calculator to see what help is available in your area.
For further information on sources of funding, please see Chapter 2 of the domestic landlord guidance.
There are certain exclusions and exemptions from meeting the minimum standard which are permitted by the regulations.
The following are examples of some of the exemptions:
- Where all the ‘relevant energy efficiency improvements’ for the property have been made (or there are none that can be made) and the property remains sub-standard.
- Property devaluation exemption – where a landlord has obtained a report from an independent surveyor who is on the RICS register of valuers advising that the installation of specific energy efficiency measures would reduce the market value of the property, or the building it forms part of, by more than five per cent.
For further details on exemptions, please see Chapter 4 of the domestic landlord guidance.
If you believe your property qualifies for an exemption, an exemption must be registered on the National PRS Exemptions Register. Please see Chapter 5 of the domestic landlord guidance for further information and the steps you should take to register a valid exemption on the PRS Exemptions Register.
Where the local authority decides to impose a financial penalty, they have the discretion to decide on the amount of the penalty, up to maximum limits set by the Regulations.
The maximum penalties are as follows;
|Penalty (less than three months in breach)||Penalty (three months or more in breach)|
Renting out a non-compliant property
• Up to £2,000, and/or
• Publication penalty
• Up to £4,000, and/or
• Publication penalty
Providing false or misleading information on the PRS Exemptions Register
Up to £1,000, and/or Publication penalty
Failing to comply with a compliance notice
Up to £2,000, and/or Publication penalty
Where penalties are imposed under more than one infringement, the total amount of the financial penalty may not be more than £5,000.
It is important to note that the maximum penalty amounts apply per property, and per breach of the Regulations.
For further information, please see Chapter 6 of the domestic landlord guidance.
Looking for more information?
You can find more information and guidance on the government’s website, including the domestic landlord guidance.