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Minimum Energy Efficiency Standards

Landlords need to get an Energy Performance Certificate (EPC) once every 10 years. The scale of the EPC ranges from A (best) to G (worst). As from the 1st April 2018 there will be a requirement for any properties rented out in the private rented sector to normally have a minimum energy performance rating of E unless the landlord registers an exemption. This means from April 2018, it will be unlawful to rent residential or commercial properties with an EPC Rating of F or G.

The regulations apply for new lets and renewals of tenancies between 6 months – 99 years with effect from 1st April 2018 and for all existing tenancies from 1st April 2023.

The penalty for renting out a property for a period of fewer than three months in breach of the regulations will be equivalent to 10% of the property’s rateable value, subject to a minimum penalty of £5,000 and a maximum of £50,000. After three months, the penalty rises to 20% of the rateable value with a minimum penalty of £10,000 and a maximum of £150,000.

Landlords are likely to be the most affected parties because the keys obligations and restrictions in the regulations fall on them. The most obvious threat to the Landlords is the financial cost of upgrading non-compliant buildings and the potential loss of income if a property cannot be rented out. In addition, valuations of non-compliant properties could also be affected if their marketability is diminished.

Given these potential risks, it is important that property owners have a full understanding of the energy efficiency of their assets. The first step is to instruct an approved EPC assessor to survey each property and establish the current rating. If the rating is less than an E, the assessor will be able to advise on how to improve it. This could be as simple as installing energy saving light bulbs and draught proofing or making more comprehensive improvements, such as replacing an ageing boiler, putting in secondary glazing or upgrading heating controls, and installing systems which are likely to have an impact on improving overall energy efficiency. The next step is to set out an action plan and phased work schedule to tackle let properties that fall short of the mark.

Amwell Property can provide a full compliance service including advice upon the legislations and its implications on your assets, assess current efficiency and energy performance risk across your portfolio and for individual assets, provide a cost for improvements, negotiate with landlords and occupiers regarding the completion of energy efficiency projects, manage any necessary works, provide energy performance reports and ratings for statutory compliance and marketing purposes and advise on marketing of your properties.

 

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