A call to action has been sent to letting agents to make their voices heard about new EPC proposals from the Department for Business, Energy & Industrial Strategy.
Under current regulations the minimum energy performance standard is an EPC Band E for domestic rented properties; this has applied since 2018 to properties let on new tenancies, including renewals, and since April this year it has applied to all privately rented properties whether there has been a change in the tenancy or not.
However within the BEIS proposals, the government’s preferred option for the future is:
- raising the energy performance standard for rental properties to Energy Performance Certificate energy efficiency rating Band C;
- achieving the improvements for new tenancies from 2025 and all tenancies from 2028;
- increasing the maximum investment amount, resulting in an average per-property spend of £4,700 under a £10,000 cap;
- introducing a ‘fabric first’ approach to energy performance improvements (this is improving the performance of the materials that make up the building fabric itself, before considering the use of mechanical systems).
Now Paul Offley, compliance officer at The Guild of Property Professionals, is urging letting agents to explain to the government how difficult this may be for landlord clients.
“I have received a number of concerns relating to the proposal to introduce a new minimum energy efficiency rating for the Private Rental Sector (PRS) in England at level C, which would apply for all new tenancies from 2025 and all existing tenancies from 2028,” says Offley.
“As you can imagine there are a number of properties where this will impact significantly on landlords in some areas where the cost of energy improvements could be high. Landlords may also be concerned at the increased costs they may face, especially as some may have issues with rent arrears from their tenants who have been impacted by coronavirus – but ‘don’t panic’ is my clear message.
“At this stage the government has announced its intention and issued a consultation process, everyone involved with the PRS has until the end of December 2020 to have their say and submit a response to the consultation; so don’t suffer in silence this is your opportunity to have your say on this topic.”
There are various exemptions likely if the government’s proposal comes to pass.
This may include the ‘all relevant improvements made’ exemption, which applies when a landlord has made improvements to the property up to a cost cap of £3,500 including VAT, and the property still does not meet the minimum standards. Several others apply, depending on the property and the landlord’s unique circumstances, such as having only recently become a landlord.