The clock is ticking down to the new rulings regarding Energy Performance Certificate ratings for rental properties. It is 10 years since these EPC certificates were introduced for all homes being sold or rented. Now, new rules are coming into force in April 2018, to introduce minimum ratings in the private rental sector. These properties must have a minimum rating or E, otherwise it will be illegal to rent them out. At first, the rule will apply to new tenancy agreements and renewals. However, by April 2023, it will be extended to include existing tenancies. Any properties with a rating below E will need improvements to improve its rating or it will have to be taken off the rental market, unless it is exempt from the ruling, such as some listed buildings or properties in conservation areas. Landlords who believe their F or G-rated homes should be exempt can apply for the properties to be registered on the PRS Exemptions Register.
How much will it cost?
Although the government has proposed a £5,000 cap for improvement costs and claims most landlords will not spend more than £1,800 on works, figures from the Residential Landlords Association reveal the real average cost will be higher for each affected property. RLA figures show that one in four landlords have already carried out improvements at an average cost of £6,780. It is estimated that about 330,000 rental properties will not comply with the new ruling. Many of these are Victorian or Edwardian homes, which will not have cavity walls.
If work is needed such as roof or wall insulation, roofing, windows or doors, then there could be financial help available. The government launched the Green Deal four years ago and it is now in the hands of private companies offering access to loans for energy-efficiency works. Repayments are made through the meter, but it is expected that savings made on lower energy bills will cover the cost of the works. The large energy companies have also signed up to the Energy Company Obligation scheme, to fund energy-efficiency measures.
Forward planning is highly advisable
Landlords are advised to start thinking about necessary improvements now, rather than wait until deadline day. You could then find yourself in a situation where there are not enough companies to carry out the necessary works as the deadline draws closer. It is also worth bearing in mind that the goalposts are expected to move over the next few years. The government is considering aiming for an ultimate rating of C or above over the next 10 years or so. It could, therefore, be prudent to get estimates for works which will achieve this rating now, rather than just aiming to get an E rating. It is advisable to look at your existing EPCs to see what needs to be done for non-compliant properties to achieve a Grade E or above. Look at the list of works and then schedule time to implement them before April.
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