New proposals for updating of EPCs?
Since 1st April 2020 landlords can no longer let or continue to let properties that have an Energy Performance Certificate that has a rating below E. The only way to do this is to have a valid exemption certificate.
If you are currently planning to let a property with an EPC rating of F or G. You will need to improve the rating to an E.
There have been moves by the Government to change this again. They have recently brought out a new scheme for Green Energy, but this only lasts to March 2021 and you can read all about that here.
If you have a property that is F or G, you must improve this. Landlords must self-fund up to £3,500 any improvements. This is the maximum the landlords are required.
What is the idea of improving an EPC?
Properties that are rated with F and G are the least efficient in housing. They impose unnecessary energy costs on the tenants. This can lead to poor health outcomes. Resulting in the resource of pressure on the health services. The Government believes. These properties also contribute towards avoidable greenhouse emissions.
To increase the efficiency of these, the Government has deemed that landlords are responsible to improve them.
Why is it the landlord’s responsibility?
While tenant’s benefit in the terms of energy reduced bills. The landlord so far as the Government are concerned also benefit. Landlords can increase tenant’s satisfaction and reduce their void periods. We don’t necessarily agree or believe that this is the case but that is only our opinion.
In 2016, a report by the State of Home on Social Housing, demonstrated that improving the efficiency of rental housing reduced both rent arrears and voids. The research showed that homes become more efficient and they are void for a shorter period. Cold homes have an average of two more weeks rent arrears per year higher than efficiency homes. This is all well and good when it comes to social housing. However not if you are a private landlord.
What are the lowest levels of energy efficiency?
The regulations set out the minimal level of energy efficiency of a private rented property in England and Wales. The lowest levels are now an EPC rating of E. Landlords should be looking to install relevant efficiency improvements. This is to improve the EPC to go to E rather than F or G.
If the minimum standard level is not obtained in the private rental sector, then you cannot rent your property out. You will have to show that you have tried your best to carry out the minimum requirements. Your letting agent would not be able to grant a tenancy to a new or existing tenant if it has a rating of F or G.
From the 1st of April 2020 landlords must not continue letting a domestic property rating is F or G.
They must ensure that their property has reached an EPC of E by the deadline of the 1st of April 2020 now extended to 2021. If you have not done so you will need to consider it.
What is the enforcement of a minimum level of the energy efficiency?
The local authorities are responsible for enforcing compliance with the domestic level of energy efficiency.
They may check whether a property meets the minimum level of efficiency. They may issue a compliance notice requesting information. This is where it appears to the local authority that the property does not comply. Where a local authority satisfied that the properties let in breach of regulations. They may serve a notice on the landlord imposing financial penalties.
Going to court for tenant removal at the property. If they have not paid their rent. Then with an EPC of F or G the court has the authority not to give possession.
What the Government now proposes?
The Government has decided as part of their efforts to reduce carbon emission. They will increase the current proposals for new long-term improvements of the energy efficiency. They intend to do across the private rental sector. The Government has been warned by the Association of residential letting agencies that the policies are not sustainable.
They are proposing a new target to lift the minimum EPC for all rental homes to a band C.
This would apply for new tenancies from 2025 and all tenancies from 2028. The Government has now outlined new proposals to include penalties of up to £30,000.00. This is for landlords who do not comply. They are considering banning agents from listing properties on portals. This is if they do not meet the standards.
Even ARLA have stated that landlords or letting agents are taking the brunt of tax changes. Many have provided support to tenants with COVID related arrears.
A simplified exemptions regime and more financial support must be made available. Otherwise the measures in their current form, will not be achievable. That will mean further reductions in the supply of rented accommodation available.
The Government consultation runs to more than 48 pages. It includes options and detailed requirements about energy improvements that it expects from the sector. The document can be seen here.
Landlords now have until the 30th December at 11.45pm to make any representations.
How will all the above affect my insurance?
Whatever you do for the energy performance this will not affect your insurance. It is a government policy to improve the housing. They wish to reduce their carbon emissions for the country.
They have even now within the recommendation suggested a maximum investment to an average of £4,700.00 but up to a £10,000.00 cap.
One of the main concerns to a lot of landlords is the banning of properties from being advertise. This being if they do not have compliance EPCs. This could therefore affect your income on the property.
There will be no effect to your insurance. However, do not hesitate to contact us for a quote. Click here.
Where does this idea of improving the Energy Performance come from?
It comes from the Department of Business Energy and Industrial Strategy in a consultation document. Which was released as part of the Government guidelines to de-carbonize buildings.
BEIS as it is commonly known stated within the documentation the following “around 43% of landlord’s use a letting agent to either let or let and manage the property for them. In addition, online property platforms (which are not generally considered to be letting agents) play an increasingly important role in the letting process”
Legislation placing requirements on lettings agents are already in place.
This includes provisions contained within the Energy Performance of Buildings (England and Wales) Regulations 2012 and in the Consumer Protection from Unfair Trading Regulations 2008 which specifically states “EPB regulations: a letting agent must secure an EPC commission for the building and, where a property is rented, a letting agent must ensure that the EPC rating is stated on any rental advertisement and commercial media. An agent is in breach of the EPB Regulations may be subject to a penalty charge of £200.00”
Under the Consumer Protection for Unfair Trading Regulations 2018: letting agents who state inaccurate EPC ratings may be in breach of these regulations
The Redress Schemes for letting agencies and property management work (the requirement to belong to a scheme) order 2014 it states that all letting agents join one of the two Government approved Redress schemes. If the letting agent fails to provide an EPC or offers a property without one. They may be in breach of the respective codes of practice and thus in breach of the Consumer Protection from Unfair Trading Regulations 2008.
We would suggest that you speak to your letting agent locally. Or read through the Consultation provided by the Government.