Energy efficiency standards and upcoming changes explained
Large commercial landlords, local councils and housing associations require a thorough understanding of the energy efficiency standards to keep occupants across England housed in appropriate conditions.
Currently, Minimum Energy Efficiency Standards (MEES) help manage the energy efficiency within privately rented, commercial and domestic properties. If these standards are not abided by, local authorities are likely to intervene.
Here we outline the current energy efficiency standards and reveal what the upcoming changes are.
The current energy efficiency standards
In the property industry, properties are only deemed energy efficient if they use less energy to heat the home and run electronics.
Under MEES, properties with an Energy Performance Certificate (EPC) below 'E' should not be let. Since 1 April 2020 these regulations have declared that unless properties have valid exemptions, they should not be occupied by tenants.
Under these rules, those letting properties with an EPC rating below 'E' could receive a financial penalty for non-compliance.
Improvement work must be done to properties with an EPC rating of 'F' or ‘G’ to reach an 'E' or a valid exemption must be registered before entering into a new tenancy.
Commercial landlords must provide their tenants with an EPC by a certified energy assessor and this certificate will remain valid for up to ten years.
Once carried out, EPCs are not to be stored away and forgotten about as they include recommendations on measures that would make the property more energy-efficient, the estimated costs to implement the changes, and the potential savings that could be made.
The council will investigate any potential breaches of the regulations, with those who violate these regulations potentially subject to a penalty notice imposing a fine of up to £5,000. This could also result in a Penalty Notice on the PRS Exemptions Register.
In an attempt to help registered providers of social housing and local authorities to meet these targets, the government introduced the Social Housing Decarbonisation Fund (SHDF).
The first wave of SHDF upgraded around 20,000 social housing properties graded with a ‘C’ or below. Wave two is due to commence in 2023 and should support the installation of energy efficiency within social homes.
Further changes are on the horizon
If the new EPC rules do go ahead, they will be brought in through the Minimum Energy Performance of Buildings Bill and it will raise the minimum grade to a ‘C’. New-build properties on the market have until 2025 to reach this target while existing tenancies have until 2028.
Although changes to energy efficiency may seem targeted towards commercial landlords and housing associations, all properties will likely need to meet these standards over time.
Statistics show that 42% of assessed homes are already at a ‘C’ or above grade. In addition to this, in the White Paper on reform for the private rented sector, the government revealed that emissions needed to be “largely eliminated” from housing stock by 2050 to meet the net-zero target.
As the government continues to tackle climate change through the installation of low-carbon technologies in properties, we presume more rules surrounding energy efficiency will get introduced in due time.
The proposed deadline for homes in England and Wales to reach a minimum grade of ‘C’ is said to be 2035. It’s recommended that commercial landlords and housing associations keep up to date with government updates regarding this topic as an official date has not been announced.
If you are a landlord and are concerned that you rating may not be high enough or indeed your property requires updating, then contact us at Allen Residential to discuss what you need to do next on 01761 412300 or email lettings@allen-residential.co.uk
