New minimum standards on energy efficiency – achieving that all important “E”

 Nick Ainger, MD AgilitySurvey

There has been an increased focus on ensuring that housing providers in the Private Rented Sector (PRS) invest in energy efficiency in recent years.  Most recently, the Energy Efficiency (Private Rented Sector) Regulations 2015 imposes new standards affecting owners of privately rented property from 1 April 2018.  The Regulations aim to ensure that the energy performance of all privately rented buildings is improved to at least an "E" Energy Performance Certificate (EPC) rating.

These regulations apply to the domestic private rented sector in England and Wales, either at point of sale, or point of let.  They define a property with an energy efficiency rating of lower than E as a “sub-standard property”.

The Minimum Energy Efficiency Standards impose three deadlines in relation to sub-standard properties:

  • From 1st April 2016,  a tenant can apply for consent to carry out energy efficiency improvements in privately rented properties. A landlord must not unreasonably refuse consent to the improvements specified in a tenant’s request
  • From 1st April 2018,  any properties rented out in the private rented sector must have a minimum energy performance rating of E on an Energy Performance Certificate (EPC)
  • From 1st April 2020, the minimum energy efficiency standards will apply to all privately rented property in scope of the regulations.

The maximum penalty for non-compliance in residential properties is £5,000.  Perhaps more importantly, authorities also have the power to name and shame non-compliant landlords, which may have significant reputational implications.

Landlords will be eligible for an exemption from reaching the minimum standard where they can prove that they have undertaken those improvements that are cost-effective but remain below an “E” EPC rating. BUT with the demise of the Green Deal Finance Company (GDFC), which would have enabled funding for measures that reach the “Golden Rule”, and the decimation of ECO, the regulations might force a landlord to fill a virgin loft or possibly fill a cavity, but not a lot else.

DECC’s very poor decision to stop funding GDFC and the massive reduction in the ambition of ECO has inadvertently undermined the standards to a degree. So it’s now incumbent on government to put in place alternative support mechanisms to ensure that the 5 million families living in private rented accommodation, much of which is in a desperately poor state of repair, are not left out in the cold.

AgilitySurvey can assist property managers and landlords by analysing current portfolios, reporting on their existing energy rating status and identifying which energy saving measures can be carried out to achieve the minimum standard if needed. We can also help clients identify sources of third party funding, such as ECO, to reduce the costs of any improvements.

Certainly as the 1st April 2018 approaches  it would be prudent to collate this data. Given the risk to property owners and occupiers, it is clear that a full understanding of the energy efficiency of all property assets should be attained.