Since April 2020, private lettings properties have required a minimum energy performance rating of EPC Band E. A few exemptions exist and landlords must apply via the PRS Exemptions Register – for more guidance on exemptions click here.
The Government, as part of their Net Zero Strategy and continued efforts to improve the overall energy performance of the private rented sector, proposes to increase this minimum rating to a Band C by 2025 for new tenancies, and all tenancies by 2028 in England and Wales. By 2035 the Government wants as many homes as possible (rental or not) to be Band C estimating that a £65+ billion capital investment is needed if the UK is to reach net-zero by 2050.
Under the current regulations landlords of properties with a EPC Band F or G are required to self-fund energy efficiency improvements up to a cap of £3,500 looking at improvements like installing loft insulation, double glazing, and cavity wall insulation. There are some third-party funding options available some of which ended applications in early 2021 (Green Homes Grant), and some extended Domestic Renewable Heat Incentive (RHI) – GOV.UK (www.gov.uk) until March 2022, and the Government is currently working on their Green Home Finance programme to be launched Spring 2022.
However, the consultation document notes that “improving PRS properties to EPC Band C will require greater investment”, so the cap might increase to £10,000 and the Government is keen to see a “fabric first” approach prioritising in order insulation, heating and hot water, windows and doors upgrade, electricity generation measures.
When looking at improvements lettings Landlord should consider planning ahead for funding, quotes and contractors, costs, disruption to in-situ tenants or planning around void periods. Landlords need to keep an eye out for other programmes included in the Governments Heat and buildings strategy – GOV.UK (www.gov.uk) which recently announced grants of £5000 for homeowners and landlords to upgrade to heat pumps, and new and amended regulations. Keep an eye on our blogs as we endeavour to bring the latest to you!
This article is intended as a guide only and does not constitute legal advice. It may vary in Scotland. Posted 1/11/2021
