New Energy Efficiency Regulations for Rented Property in 2018

Overview

These regulations will affect all residential and commercial properties, so, landlords will need to ensure that their property is at the minimum standard before granting any new tenancies or renewing any existing ones.

The regulations will then apply to all existing residential properties from April 2020 and all existing commercial properties from April 2023 (properties where there has been no change to any tenancy agreements, not just new lettings).

Any properties with a rating of F or G will be declared as ‘sub-standard’ and will be illegal to let out and any breaches of these regulations could see landlords facing huge fines.

All sub-standard properties will need to have improvements made so they reach the minimum standard, unless they are exempt from the regulations.

What is an EPC?

An EPC contains:

• A rating of how energy efficient your property is. The rating is from A to G (with A being the highest level of efficiency).
  
  
• The estimated energy costs of your property, including; lighting, heating and water.
  
  
• Recommendations of ways to reduce energy usage and save money.
  
  
• Summary and rating of how efficient certain features are, including; walls, floor, roof and windows.

What Properties are Exempt from the Regulations?

• When the property has no improvements that can be made, or the landlord has done all that they can and the property is still sub-standard.
  
  
• When the improvements made would reduce the property’s market value by 5% or more.
  
  
• When certain required energy improvements need consent from a third party which has been refused or has been given with uncompilable conditions.
  
  
• If, in the rare circumstance, a person has become a landlord suddenly and it would be considered unreasonable to require them to conform with the regulations straight away.

If a property is exempt from the regulations because of any of these reasons, the case must be registered on the National PRS Exemptions Register. The exemption will last for 5 years, after which, the exemption will be removed and the landlord is required to try again to make improvements. If this is not possible, another exemption can be made.

If a registered exempt property is sold, the exemption can not pass over to the new landlord or owner. The exemption will cease to be effective and the new owner/landlord will have to either make any improvements to make the property reach the minimum energy standard or register a new exemption if the improvements are not possible.

What are The Penalties?

If a property fails to meet the minimum required energy efficiency rating and the landlord makes a breach of the regulations by continuing to let out the property, they will find themselves facing hefty fines.

The power to impose a financial penalty falls with the Local Authority. They can decide the amount of the penalty, up to the maximum amount set.

Below are the maximum penalties

What Improvements Can be Made?

There is a huge number of different measures that can be taken to improve the energy efficiency of the property.

Below are just some examples;

• Wall, floor and roof insulation.
• Double glazing on windows.
• Solar panels.
• Draught proofing doors and windows.
• Replacing old light bulbs with LED bulbs.
• Hot water controls (temperature and timers to avoid overuse).
• Air source heat pumps.

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