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UK property landlords to be given until 2018 to improve their energy ratings

UK Energy and Climate Secretary Chris Huhne has announced changes in the new Energy Bill which mean that from April 2016 property landlords will not be able to refuse reasonable requests from tenants, or local authorities, to improve their property.

From April 2018 the government will make it unlawful to rent out a house or business premise which has less than an ‘E’ energy efficiency rating, ensuring at least 682,000 properties will have to be improved.
‘The Government has made it clear that renting out dangerously cold and draughty homes is unacceptable. Landlords will have to improve their properties or face prosecution,’ Huhne said.
 ‘We welcome the recognition that there simply isn't the capacity in the energy efficiency supply sector to expect change overnight and hence why the Minister has plumped for 2018.

This seems reasonable for the private rented sector, but if the capacity does not come on stream or the Green Deal fails there will be significant consequences in terms of reducing housing supply and potentially poor works if there is a last minute rush,’ said Ian Fletcher, director of policy at the British Property Federation.

‘Previous drafts of the Energy Bill were proposing a more cautious approach which relied on a review in 2013/14 to check progress, and the implications if there was a lack of capacity, before considering how any legislative sticks would be applied. If that is dispensed with, the Secretary of State is obviously pursuing a riskier strategy,’ he explained.

‘It is important that landlords start to consider whether they will be caught and have their plans ready for when the Green Deal goes live next year. The Government has binding climate change commitments and landlords are party to those. There are opportunities, however, as well as threats in improving energy efficiency and landlords who start thinking about and acting on the issues will be best placed to handle both,’ he added.

Ian Potter, operations manager of the Association of Residential Letting Agents, described the decision to allow F and G rated properties to remain on the market until 2018 a practical one, given that around 17% of properties in the PRS fall into this category.
‘This equates to around 500,000 properties in the PRS if landlords do not respond to the Government's proposals. However, we remain concerned about the lack of detail on greening rental stock.  So far, there is no clarity on how energy improvements will be assessed or enforced or, importantly, how this assessment will be funded,’ he said.

‘ARLA would like to see the Energy Performance Certificate Register made publicly available so that those properties that do not meet energy efficiency standards can be identified. We believe that the Bill in its current form risks disincentivising the lettings market and discouraging landlords from investing in the PRS, at exactly the time when the Government should be focused on keeping properties in circulation,’ he added.