Rural landlords brace for tougher energy efficiency standards

The government has just launched a new consultation on increasing the MEES for domestic properties, despite the latest regulations only kicking in for existing tenancies on 1 April this year.

However, as buildings are a major contributor to carbon emissions, the direction of travel for increased energy efficiency seems inevitable. A consultation on the future trajectory of MEES for commercial premises last year, for example, included analysis on the impact of a minimum Band C Energy Performance Certificate (EPC) by 2030. 

The consultation for domestic properties, which opened on 30 September 2020, also sets out a preferred policy scenario where rental properties will be required to achieve a minimum Band C EPC.

This would be introduced from 1 April 2025 for new tenancies and for existing tenancies by 1 April 2028.

Furthermore, the consultation considers increasing the cap on expenditure landlords are required to make from £3,500 to £10,000 per property. 

With potentially only five years to upgrade the estimated three million homes that fall below a Band C in the private rented sector in England, landlords would be prudent to give careful thought to addressing this.

A review of property portfolios will highlight properties at risk of future changes in legislation. Thought needs to be given to making improvements during any void periods, or when there is grant funding available to assist with the cost.

Green grant

The government recently launched its Green Homes Grant for England, which will give vouchers worth up to £5,000 to cover up to two-thirds of the costs of certain energy efficiency improvements. 

To be eligible, applicants need to install at least one ‘primary’ measure (such as wall or floor insulation) to also be eligible to apply for ‘secondary’ measures like double glazing and heating controls. 

Although the scheme is only available to properties with a minimum Band E, or an exemption registered, it is still an opportunity for landlords to reduce the cost of the proposed change.

It would also be worth considering wider schemes to improve energy efficiency, for example installing solar PV or a small wind turbine to supply properties on an estate, instead of undergoing a number of minor works across a portfolio.

That said, the consultation document suggests that money spent on improvements before 2023 would not count towards an exemption under the cost cap. 

The consultation is due to close on 30 December and the outcome will be one to watch closely next year.

Respond to the consultation on improving the energy performance of privately rented homes 

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Main photo by Liv Cashman on Unsplash