Changes to Energy Efficiency Regulations Expected for Rental Sector

By Katie Todd

energy efficiency improvements

Government Proposes Changes to Energy Efficiency Regulations

October 20, 2020 Katie Todd 1 Comment

A government consultation has launched seeking to amend the current Energy Efficiency Regulations and improve the energy performance of private rented homes in the UK.

One of the main proposals is to bring the minimum energy efficiency standards up to Band C by 2028. With 20% of housing stock represented by the PRS, the government consider these plans to be “a vital part of our wider strategy to decarbonise buildings cost-effectively, in light of the significant challenges posed by climate change”.

The consultation – now live and running until 30th December 2020 – hopes to get feedback from landlords, tenants, local authorities and others affected by the proposed changes, with specific aims to:

  • Deliver significant emission reductions
  • Decrease bills for low income and vulnerable tenants
  • Increase the quality, value and desirability of landlords’ assets
  • Reduce energy bills for tenants and ensure warmer homes
  •  Support investment in high-quality jobs and skills in the domestic retrofit supply chain across England and Wales
  • Provide greater energy security through lower energy demand on the grid and reduced fuel imports

Read the full summary here: GOV.UK Improving the energy performance of privately rented homes in England and Wales

Raising the energy performance standard to Band C

One of the core policies proposed by the government is to increase the minimum EPC rating to Band C. Currently, all private rented properties must have an EPC rating of ‘E’ or above to be legally let. 

The initial idea is to introduce the new measures on a phased basis: applying to ‘new tenancies’ by 2025 and all other tenancies by 2028.

These far-off dates – along with the phased process – hopes to “limit disruption to landlords and tenants” by allowing plenty of time for planning and saving and encouraging a “whole house” approach to improvements.

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Increasing the maximum investment cap to £10,000 

The consultation also proposes that the current landlord spend requirement for energy efficiency improvements be increased. At the moment, the spend is capped at £3,500 – but property improvements to meet Band C will require greater investment. 

The government have calculated that on average, landlords will spend £4,700 per property to reach an EPC rating of C if a maximum cap of £10,000 is set. This cost cap is simply a proposed figure, but the consultation summary states that it is “the optimal level at which the majority of PRS properties would be improved to EPC Band C whilst trying to limit expense for landlords”.

Landlords are also encouraged to make use of the Green Homes Grant offering vouchers to cover two-thirds of energy improvements costs up to £5,000.

Read more: How Will the Chancellor’s Green Plan Affect Landlords?

 A ‘fabric first’ approach to energy performance improvements

The government will be encouraging landlords and property owners to take a “fabric first” approach to installing energy improvement measures. This involves prioritising fabric efficiency – such as insulation – to reduce energy demand, lower bill costs and reduce carbon emissions for that property. To align with this, improvements laid out in EPCs will be listed in the following order:

1) Insulation

2) Heating and hot water

3) Upgrades to windows and doors

4) Electricity generation measures

Have your say

The government are collecting responses regarding this consultation until 30th December 2020. Publishing of the government response is expected in Spring 2021, followed by amendments to the regulations in the Autumn.

Take a look at the full consultation summary here and submit your response. Share your thoughts with other landlords and tenants in the comments below.

About Katie Todd

Katie is LettingaProperty.com's Digital Content Editor. Joining the company in September 2019, Katie edits and manages the Landlord Blog, oversees our social media channels and works with the team on in-house projects and marketing strategies. To put it plainly, if we need help with words - Katie's our go-to.

One Comment

    October 20, 2020 REPLY

    Why is the government putting even more financial pressure on good landlords. The way things are at the moment with the pandemic tennants are not paying full rents at the moment so we are struggling to pay mortgages, then there is the abolition of mortgage interest relief and now this, it makes you think you should just sell up and get out of this game too must stress and worry.

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