From April 2018 landlords will only be able to rent properties rated ‘E’ or above for energy performance
Landlords are “ill-informed” about looming legislation that will banish the UK’s draftiest homes from the rental market, according to a survey of 500 residential landlords released this week by energy supplier E.ON.
Some two-thirds of landlords are unaware of the new rules, which will mean that from April 2018 homes must have an Energy Performance Certificate (EPC) rating the property at ‘E’ or above for it to be rented on the private market. EPC ratings currently run from A-G.
The Minimum Energy Efficiency Standards (MEES) legislation will require landlords to bring homes up to this standard before signing new tenancies or renewing existing contracts with tenants. The new rules are expected to impact around 330,000 homes across the UK.
A quarter of landlords when asked said they did not know anything about the new rules, while a further 42 per cent said they were only “vaguely aware” of the coming changes, despite the fact they will take effect in less than a year.
Moreover, almost half were unaware of the penalties for breaching the regulations, which can be as high as 20 per cent of the rateable value of a property.
“Government housing data already shows that the private rented sector has the highest proportion of properties falling in the F and G bands, so it’s vital landlords look into what they need to do before the regulations come into effect,” Mike Feely, energy efficiency expert at E.ON, said in a statement. “Whether landlords have in the past been put off by the perceived hassle, expense, or their own lack of knowledge around the subject, the clock is definitely ticking on the need to improve properties.”
Landlords estimate it will cost on average £1,200 to bring a home up to standard.
However, in bad news for tenants, more than 40 per cent of the landlords questioned said they would consider raising rents to pay for the necessary improvements, arguing it would be the tenant that would receive the benefit through lower energy bills.
The soon to be re-launched Green Deal Finance Company (GDFC) is looking to tap into this potential new market by offering finance packages to rented properties that would allow for upgrades to be carried out at no upfront cost.
Tenants would then pay for the work through a levy on energy bills, which would likely be more than matched by the savings on their energy bills that would result from the energy efficiency improvements.