You may or may not know that in April 2018, the Minimum Energy Efficiency Standards (MEES) will come into effect, meaning that it will be illegal to renew or begin any tenancy for properties that have an EPC (Energy Performance Certificate) rating of F or G.
Most landlords are aware that an EPC is currently mandatory for anyone selling or letting a property, and the rating ranges from A, which is the best rating, to G, which is the lowest. You generally see EPCs located in marketing material for properties and we are seeing more and more tenants turning down the properties with the lower rankings due to this information.
Here are some of the most important things you need to know as a landlord;
1. It’s not just Residential EPCs but Commercial EPCs will also be affected within the Private Rental Sector.
As expected, these new minimum energy efficiency requirements will apply to both the domestic and non-domestic side meaning that whether a landlord is letting out a commercial property or a house to a tenant, it could be unlawful to do so should the building not meet these new minimum EPC requirements.
2. Non-domestic (commercial) buildings and domestic dwellings will have a minimum energy efficiency standard of an E EPC rating.
According to various sources this new rating will be based on C02 emissions for commercial property, this is the EPC graph displayed on the first page of the commercial energy efficiency certificate. However, with regards to domestic dwellings, this new rating will be based on Fuel costs rather than C02 emissions for domestic property. This is the EPC graph displayed on the first page of a domestic energy certificate.
3. The EPC regulation changes are regarding the energy efficiency of buildings and mean that a rating of F or G could cause real problems.
Potential issues could arise after 1 April 2018 when trying to let a house/flat or renew a commercial lease with an EPC rating worse than an E. Between 2008 and 2015, 26% of Domestic properties achieved an E, F or G rating. This official Government data suggests that a significant proportion of the UK building stock could be affected by the new energy performance regulations.
4. Where the EPC Rating is “F” or “G” (or is at risk of becoming so) an “Energy Efficiency Plan” should be put in place to improve the energy efficiency of the property.
This should include assessing the costs and benefits of improving energy efficiency and weighing these against options to market the property and/or to re-gear the lease. Energy efficiency improvements should take advantage of void periods, lease breaks and/or be included as part of the on-going maintenance and renewal programme. The improvement works would need to be implemented before April 2018.
5. Things you can do to improve the rating;
a) Lighting - Replace existing halogen or non-Low Energy Lighting (LEL) with LEL’s, Compact Fluorescent Light’s (CFL) or Light Emitting Diodes (LEDs) – simple and inexpensive to introduce.
b) Roof Insulation - Ensure that the loft insulation is at least 270mm in depth. If your loft is at 90mm or less you can get funding to have the loft filled or topped up.
c) Wall Construction - If your property has a cavity wall construction, ensure that this is filled. Funding is also available for this efficiency measure and has a huge bearing on the EPC rating.
d) Heating Controls - Even if your property has an old boiler, the introduction of modern controls such as a room thermostats, individual Thermostatic Radiator Valves (TRVs) and Boiler Programmers will have a positive bearing on the EPC results – straightforward but slightly more expensive to introduce.
e) Central Heating System - Replacing an old, inefficient boiler will have a significant impact on any property's EPC rating – however this is a significant alteration with large expense.
Still confused and want to know what this means for your property?
Get in touch and our specialist Property Managers can either provide tailored advice or provide you with contact details of a local energy assessor.
Angharad Trueman – Operations Manager