Properties With EPC Rating F or G Set to Cost Landlords up to £3,500

The government have announced that changes to regulations will mean that landlords in properties with an energy performance rating of F or G, will be expected to pay up to £3,500 towards energy efficiency measures to improve the rating of their properties.

Requirements under the new regulations

 Since April 2018, landlords owning some of the coldest privately rented homes in the UK have been required to improve these properties with energy efficiency measures where support is available to cover the costs.

However, under the new regulations landlords will be expected to contribute up to £3,500 towards the costs of improving energy efficiency ratings. Landlords who have properties with an Energy Performance Certificate (EPC) rated F or G, the lowest energy efficient ratings available, will be unable to list their properties on the rental market for new tenancies, until the improvements have been made. This includes things like – installing double glazing, switching to energy efficient lighting, and improving loft insulation. Upgrades like these are expected to cost around £1,200.

Landlords will be eligible to apply to the government for a ‘high cost’ exemption if upgrades cost more than £3,500. Any landlord found in breach of these new regulations will face a fine of up to £5,000.

Why is this being implemented?

The changes in regulations are largely due to the government’s focus on reducing fuel poverty and supporting green energy practices to lower carbon emissions. Energy and Clean Growth Minister Claire Perry explains:

“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.”

The Department of Business, Energy and Industrial Strategy (BEIS) estimates that fuel poverty affects 2.55 million households in England. Fuel poverty is when members of a household cannot afford to keep adequately warm at a reasonable cost, given their income. Properties with low efficiency ratings use more energy and cost more to heat. This results in some households being unable to afford to keep their home warm during Winter months.

Excess cold is the largest preventable cause of death in the private rental sector. It is estimated by the World Health Organisation that 30% of winter deaths are caused by people living in cold homes. Regulations requiring rental properties to meet energy efficiency standards will help tackle fuel poverty by reducing the amount of fuel-poor households and ensuring that everyone is protected against the cold in their own home. 

The new regulations also demonstrate the governments support of green energy practices. Having a more energy efficient home will not only save tenants money on fuel costs, but also reduce the amount of environmental harm associated with running a household and keeping it warm. In this age of environmental decline, it is more important than ever for properties to be as energy efficient as possible, and to reduce the amount of carbon emissions we are contributing.

Who will be affected and when?

These changes will come into force during 2019. The majority of rental properties in the UK are already compliant, meaning most landlords will not be affected by the changes.

It is estimated that there are around 200,000 landlords in the UK with an F or G rated property. These landlords will be required to make upgrades to improve their properties energy efficiency rating to a band E or above. The cost of this is anticipated to be around £1,200. It is expected that the cost to the landlord will be more than offset by the increase in property value as a result of the improvements. Landlords may also have access to a variety of funding schemes, including the Energy Obligation scheme, which supports landlords in bringing their properties up to the required energy standard. 

Final Thought

The new regulations will help tackle fuel poverty, while also supporting greener energy practices. Ensuring that all rental properties meet a certain level of energy efficiency will bring greater fairness to energy costs and make the costs involved with renting more transparent. The cost of upgrades to landlords is estimated to be far lower than the upper threshold of £3,500, and it is also expected that the property’s value will increase as a result of the improvements.

If you are a Landlord or Housing Association and will be directly affected by these regulation changes, Nexus can provide you with a great value domestic EPC assessment with recommendations on how to improve the energy efficiency of your property. Our EPC London, EPC Glasgow, and other locations across the UK are available to contact to receive a quote.