For the panel discussion for our upcoming landlord seminar, we have been finding out what questions you would like answered by the panel.

By far the highest query has been around energy performance certificates (EPCs) and what needs to be done in readiness for the expected changes due to the government pledging that as a country we want to be net zero by 2050.

You will have read that all rental properties must have a minimum rating of C before they can be rented, and this improvement needs to happen by 2025…or 2026… or 2030 – there is a great deal of confusion as to when this will need to be sorted! To be honest the only people that I can see pushing the 2025 date in the media are solar panel, double glazing, air source heat pump companies.

Cynical old me, they do have something to benefit from the change!

Therefore, the short answer to ‘what do I need to do now’ is nothing.

We all need to wait for the outcome of the consultation paper which came out in 2020 and nothing has been heard of since.

If you go onto the Government website you can see that this has not been republished since 2017 aside from the brief update in 2020 advising of “landlords can no longer let or continue to let properties covered by the MEES Regulations if they have an EPC rating below E, unless they have a valid exemption in place.”

So how did we get here – a bit of history

In 2020 the Government pledged that the country would aim to be net zero by 2050. At this point they bought out a consultation paper on Minimum Energy Efficiency Standards ( MEES) for 2025  see our blog here. A consultation paper is exactly what it sounds like. From the .GOV web site I found the following definition:

Consultation documents produced by the Government. The aim of this document is to allow people both inside and outside Parliament to give the department feedback on its policy or legislative proposals.

ie it is not law. Perhaps when the consultation paper showed that 79% of properties in the UK are a D or below someone realised that this would be somewhat of an uphill struggle and decided to kick it into the long grass? To add a little more ‘fun’ to whole debacle. The way that EPCs are rated has changed from how much carbon an individual property emits to how much it costs to run! Guess what – it is more expensive now, which will lead potentially to a lower rating. Anecdotally we have heard that that some EPC renewals (they need to be done every ten years) have been downgraded. However, I must report from the portfolio that we manage we have not seen this.

But I want to do something now

If you do want to improve the grading of your property, the best way forward is to get an up-to-date EPC. This will give you a shopping list of what needs to be done to achieve a higher rating. Beware though, you have to do everything in order that it appears on the report – you can’t pick and choose what you want to improve.

The first item on a majority of EPC reports at the moment says add solar panels. However a few years ago all EPCs seem to mention underfloor insulation.Which was impossible in 99% of the properties! So maybe that why we are now seeing the mention of solar panels. Yes it is a total mess!

The most important thing that I make sure I provide as a landlord is a safe home. I look at the basics – insulation in the loft and around the immersion heater, windows and doors are draught proofed, the roof and gutters are in good order. The basics that all the landlords we work with follow.

However commercial landlords rules have changed

Since 1 April 2018, the Minimum Energy Efficiency Standards (MEES) have required commercial landlords to ensure that their commercial properties in England have a minimum Energy Performance Certificate (EPC) rating of E before granting a new tenancy to new or existing tenants, unless a valid exemption applies.

In a significant extension of these rules, from 1 April 2023 it will be unlawful for a landlord to continue to let a commercial property with a sub-standard rating ie F or G, unless a valid exemption applies. Leases which are excluded include those for a term of 99 years or more, and those granted for a term not exceeding 6 months (unless the lease contains an option to renew it beyond 6 months or, at the time it is granted, the tenant has been in occupation for a continuous period of more than 12 months).

Take out

There is a lot of noise around EPC grades and nothing so far to say when and what is to happen. Also, the present consultation papers have a number of loop holes which will make it very easy to register for an exemption. Best advice – watch this space as soon as we know we will be helping you through the legislation.