From April, all buy-to-let properties in England and Wales will need to achieve Minimum Energy Efficiency Standards (MEES), so landlords need to act now.
All privately rented residential properties will need to achieve grade E or higher in their Energy Performance Certificates (EPCs) from the beginning of next month, as MEES will from that point apply to both new and existing tenancies.
Landlords who own properties that don’t achieve an EPC rating of A to F must complete any necessary upgrade work now, as they have less than a month left to ensure they comply. Those who fail to do so could face prosecution.
Where work needs to be done to raise the EPC rating, there is a £3,500 cost cap in place. This means that landlords must spend anywhere up to £3,500 (including VAT) on improvements to the energy efficiency of each of their rental properties. If, after spending this amount, a property still would not reach the minimum level, the landlord can apply for an exemption on the PRS Register.
How to improve your EPC rating
The new MEES rules first came into effect in April 2018 for any rental property that started a new tenancy, or a renewed one, after this date. From next month, the rules will begin to apply to all existing, ongoing, periodic and secure tenancies, meaning everyone who owns a rental property in the UK must ensure that they comply.
So for landlords who currently own properties with EPC ratings of F or G, it is essential to now increase the rating before the deadline. Ways to do this include:
- Top up your loft insulation: a cheap, easy way to add points onto your score.
- Install cavity wall insulation: this could improve your rating by around 5-10 points.
- Upgrade your heating: old boilers are a prime cause of low EPC ratings.
- Insulate your hot water cylinder: not everyone has one, but if you do it can lose heat without insulation.
- Install double glazing: this should make properties much warmer for occupants.
- Seal any open chimneys: again, these can create draught so can make a difference to the EPC.
- Add renewables: solar panels, wind turbines and even ground source heat pumps could be considered.
- Lighting: simple but effective, replacing lightbulbs with energy efficient ones could give your property a boost.
Some EPCs could be wrong
Aside from the above, the Residential Landlords Association (RLA) has also pointed out that whether a property has solid walls makes a difference. Some landlords whose properties fall below the required standard could have them reassessed. They may find that they now achieve the minimum due to a change in the assessment.
On its website, the RLA states: “Research has also identified that energy performance certificates (EPCs) understate the thermal efficiency of solid walls. Many PRS properties have solid walls. Usually they were built pre-1918 but can be later.
“The government have now recalibrated EPCs to give a truer reading. This could mean that some solid wall properties currently rated F under an EPC will no longer require any work and less work may be required in the case of a G rated property.”
“Landlords of F and G rated solid wall properties are therefore advised to consider having a new EPC check performed. In these cases, obtaining a new EPC may mean that you no longer need to comply with the regulations or less work may be required.”
Exceptions to the rule
Some landlords will be able to declare themselves exempt, although the rules could change on this. Aside from the £3,500 per property cost cap, other reasons for exemption include:
- If the tenant won’t give consent for improvement works to be carried out.
- Where the improvements would require consent from a third party and you have been unable to obtain such consent despite your reasonable efforts.
- If carrying out the necessary works will devalue the property by more than 5%.
If a rental property does not meet the MEES standards after 1st April, the owner could face a civil penalty of up to £4,000.
For property investors and landlords who focus on new-builds, there shouldn’t be an issue. Newly built properties tend to have the highest EPC ratings. As the construction industry places an increasing focus on energy efficiency in building, those who invest in newer properties will see energy savings over the long run.
