New energy efficiency rules now in place for residential landlords in England and Wales

New energy efficiency rules for properties in the private rented sector in England and Wales are now in force with industry organisations urging those letting property to make sure they are compliant.

There is concern that agents and landlords may be unaware that the Statutory Instrument to bring in the new energy efficiency regulations went through in the middle of March setting out the new requirements to be in place from 01 April 2019.

An amendment made has introduced a new self-funding element for residential landlords which takes effect if landlords are unable to access third party funding to improve any rental properties with F or G ratings.

This element is capped at £3,500 including VAT per property. It means that a landlord without funding must spend up to this amount to improve the property to a minimum E rating.

Landlords with properties that have an energy performance rating of F or G will be expected to pay up to £3500 from 01 April, in order to improve the energy efficiency rating of the property.

Many landlords will already be compliant as since April 2018 it has been a requirement for any properties rented out in the private rented sector under new tenancies to have a minimum energy performance rating of E on an Energy Performance Certificate (EPC).

Landlords with existing ‘no cost’ registered exemptions will only remain covered by these until the end of March 2020 as the regulations will come into force for all existing tenancies on 1st April 2020.

The National Landlords Association (NLA) pointed out that landlords with properties which require an EPC cannot start new tenancies in England and Wales in properties with a rating lower than E. From April 2020, all existing tenancies which require an EPC will need to have a minimum E rating.

The NLA said that landlords who have a current exemption should make sure that they know whether this will be affected by the new regulations, and seek a new exemption if appropriate after 01 April 2019.

Any landlords with F or G rated properties should review their Energy Performance Certificate which indicates what changes they can make to increase the rating of their property, and ensure they meet the requirements or have a valid exemption.

According to the Residential Landlords Association (RLA) where upgrades are necessary, the average cost to improve an F or G rated property to a band E is expected to be around £1,200, well below the upper ceiling being brought forward under the new regulations.

Examples of measures include installing floor insulation, low energy lighting or increasing loft insulation. If upgrades will cost more than £3,500, landlords will be able to register for an exemption.