16 Nov

Landlords foot the bill to bring properties up to energy efficiency standards

Landlords foot the bill to bring properties up to energy efficiency standards

Energy and Clean Growth Minister Claire Perry announced on the 5th November that the Government will make landlords in England and Wales pay anything up to £3500 for making improvements to rented properties to bring them in line with the minimum energy efficiency standards, which will be a minimum of an E rating from April 2020.
The Energy Efficiency (Private Rented Sector) (England and Wales) Regulations 2015 made it unlawful from 1 April 2018 to let a home on a new tenancy with an EPC rating of F of G, but landlords with existing tenancies were given a further two years to make appropriate improvements.

Earlier in the year there was a public consultation, to which ARLA responded, which looked at amending the 2015 regulations by introducing a capped landlord contribution of £2500 to make necessary energy efficiency improvements to under-performing rental properties. However, despite promising pre-consultation that any measures would "avoid upfront costs" for landlords, the Government says that, following 'additional modelling and analysis', they have decided to increase the landlord cap to £3500. They believe that the revised cap strikes a compromise that will enable a significant improvement to be made in the proportion of properties reaching EPC band E, improving those properties not able to quite reach band E, while addressing concerns of those worried about the potential impact on landlords of imposing too high a financial commitment.

The Government claim that the average cost for bringing properties up to scratch will be £1200, so most landlords will be unaffected. Examples of measures that can be taken to improve an EPC rating include: installing loft installation or low energy lighting, or replacing inefficient boilers. 

Energy and Clean Growth Minister Claire Perry said:

"While the vast majority of landlords take great pride in the properties they own, a minority still rent out housing that is difficult to keep warm. Upgrading these homes so they are more energy efficient is one of the most effective ways to tackle fuel poverty and help bring down bills for their tenants, saving them £180 a year.

"Everyone should be protected against the cold in their own home and today’s announcement will bring this reality closer."

David Cox, Chief Executive, ARLA Propertymark comments on the Government’s proposed cap for private landlords for EPC improvements to their rented properties: “Yesterday’s announcement that landlords will need to pay the first £3,500 to make improvements to their properties to ensure they are minimum EPC rated E or higher, is bad news for the private rented sector. Over the last few years, the financial burdens faced by landlords have increased time after time, which is pushing rent costs up and driving buy-to-let investors out of the market. Under the Energy Act 2011, the Government pledged to avoid any ‘upfront costs’ for landlords – a principle which has been disregarded by setting the cap as high as £3,500.

“The Government should now show its support for landlords by reintroducing the Landlords’ Energy Saving Allowance (LESA) and extending it to include anything contained within the Recommendations Report of an EPC.”

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