Landlords at this moment in time are expected to have until 2025 to upgrade the newly rented properties to the energy performance certificate C standard. Landlords then have until 2028 to get existing tenancies up to scratch.
What work is to be done?
The average rating for private rental homes still sits at a D rating in England and Wales. 15% of landlords are unaware of the changing legalisation.
We understand that 40% private rented properties are unlikely to meet energy efficient targets by 2028.
Does your property have an energy performance certificate?
A lot of landlords aren’t aware that prior to 2007 didn’t need an energy performance certificate in order to rent their property out. However, since then an energy performance certificate is a critical part of the documentation. Do you know if you have an energy performance certificate or what rating it is? You should always check and you can use the EPC register by putting your postcode in here. It is important you understand it is a legal document. It has to be served on the tenant and has to be above an F rating in order for you to rent the property out.
Energy performance certificates requirements are enforced by district councils. They can ask for an energy performance certificate from the owner or landlord at any point. Fines can be sent out by the local authorities from anywhere from £5,000 up to £40,000 depending on the property and the requirement of the EPC.
We are aware that some councils are starting to go through their local properties and check with landlords whether they are still renting properties out with a rating that is F or below. They are then also looking to impose fines.
MAKE SURE YOU HAVE AN EPC AND CHECK ITS RAITING.
Costs and hardest hit properties.
The Government predicts that upgrades will cost potentially up to £4,700 per property and nearly half of landlords are saying they will have to recoup the costs through the rising rents.
The energy minster has proposed legalisation that no new homes have a gas boiler from 2025. Reforming the EPC rating to create a more accessible net 0 performance certificate for house holds and adding more potential change to the mix.
It is likely that older homes will be hit with the hardest with the changing energy efficiency reform. It is a potential that one third of properties that are rented were built before 1990. New build properties including houses and flats are far more likely to already comply with the energy efficiency standards.
Landlords need more support upfront. There has not yet been word from the Government whether there will be help or support to come from them. A lot of landlords lack the information that there is in this regard. There are various existing schemes offering financial support for upgrades that landlords may be able to access. Such as the boiler upgrade scheme, VAT relief on energy saving materials and a green deal loan. However, these don’t really go far enough.
What are the benefits of energy efficient properties?
More efficient homes are often cheaper to heat and warmer to live in. Reducing the likelihood of maintenance issues in frozen pipes or condensation causing damp and mould.
Properties that have higher energy efficiency rating also become increasingly desirable to let. It is now a statistical fact that three quarters of the renters aged between 18-34 say they check the EPC of a property before making a decision and will pay up to a 13% premium for an energy efficient rental property.
When people now purchase investments they will need to look at the energy performance ratings for properties.
Mark Harrington proprietor to Harringtons Lettings