Landlords face footing bill for EPC improvements as Government abolishes free option

Landlords will have to fund some of the changes needed to make their rental properties compliant with minimum energy efficiency requirements.

The Government is to introduce the payment requirement, capped at £3,500.

This replaces the current “no cost” exemption which allowed landlords to avoid implementing energy efficiency measures if there is no funding available to recoup their costs.

Instead, they will have to contribute up to the £3,500, including VAT, from next year.

It follows a consultation on minimum energy efficiency standards that closed in March.

A statement from the Ministry of Housing said the new regulations would speed up the process of ensuring rental homes meet the minimum Energy Performance Certificate (EPC) rating of E.

Upgrading is expected to cost £1,200 on average and will affect 290,000 properties, which represents around 6% of the overall domestic market, the announcement said.

The new regulations will also remove an exemption that landlords could use where tenants refused Green Deal funding that would increase their energy bills.

Landlords will instead have to fund the works up to the capped level.

Claire Perry, energy and clean growth minister, said: “While the vast majority of landlords take great pride in the properties they own, a minority still rent out housing that is difficult to keep warm.

“Upgrading these homes so they are more energy efficient is one of the most effective ways to tackle fuel poverty and help bring down bills for their tenants, saving them £180 a year.”

Heather Wheeler, housing minister, said: “This builds on our ongoing work to crack down on the small minority of rogue landlords and drive up standards in the private rented sector, including through our reviews of health and safety standards and carbon monoxide alarm requirements in the home.

“Most landlords will be unaffected by the changes as their properties are already compliant. 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 – far below the upper ceiling being brought forward under 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.

“The measures will come into force during 2019 and will affect around 200,000 landlords, some of whom will still have access to a variety of funding schemes.

“This includes support from the Energy Company Obligation scheme and local grants to bring their properties up to the required standard.

“These measures will help to ensure the housing and energy market works for everyone by bringing greater fairness to energy costs and making renting fair and more transparent for all.”

Commenting on the move, David Cox, chief executive of ARLA Propertymark, called for the reintroduction of the Landlords’ Energy Saving Allowance.

He said: “Over the past few years, the financial burdens faced by landlords have increased time after time, which is pushing rent costs up and driving buy-to-let investors out of the market.

“Under the Energy Act 2011, the Government pledged to avoid any ‘upfront costs’ for landlords – a principle which has been disregarded by setting the cap as high as £3,500.

“The Government should now show its support for landlords by reintroducing the Landlords’ Energy Saving Allowance (LESA) and extending it to include anything contained within the recommendations report of an EPC.”

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/753710/Final_PRS_Minimum_Standards_Consultation_Government_Response.pdf

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7 Comments

  1. Ric

    Tenant: I want the home to be more efficient.
    Agent: Landlord, you need to spend £3,000 on improvements.
    Landlord: No worries, lets get it done.
    Tenant: Thanks, I would also like to stay on for another 12 months.
    Agent: No worries, I will ask the Landlord.
    Landlord: That’s fine, all good the rent is £1,000 now not £750 for the next 12 months.
    Agent: I won’t ask why Landlord: Best not.
    Tenant: I will wear a jumper. Agent: They will wear a jumper.
    Landlord: Good job, tell them £850 a month then! That should heat them up.
    NOTE TO SHELTER: No actual tenants were harmed in the making of this scenario. I do not condone such fictional behaviour, nor do I encourage it. I am however stating the very obvious.

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    1. Rent Rebel

      What’s that? Another landlord that expects their tenants to actually fund the landlord’s repairs for them, and actually make the home fit for habitation? How dare they complain huh? ‘That’ll teach ’em. I’ll hit ’em where it hurts’. If they don’t like it, they can leave yeah? Then you can boast that ‘most tenants end tenancies, you know’.  These are tenants on a 6 or 12 month contract at most if they’re ‘lucky’ Possibly even just rolling periodic, precisely so the landlord can evict them at any time if they don’t suck up the gangster rent increase.

      And i see your true colours shining through…

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  2. PossessionFriendUK39

    LED bulbs, loft  Insulation –   Yes  absolutely agree its a landlords duty.

    But Floor insulation – for the whole ground floor of a property to be dug up ( tenants accommodated elsewhere for some weeks )  ain’t gonna be done for £3,500

    I really would like to use whatever builder Heather employs though.

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  3. PossessionFriendUK39

    Of course the chancellor could have helped this situation in the budget by re-introducing L.E.S.A. ?
    ( don’t think Phil and Heather are on speaking terms ! )

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  4. CountryLass

    Oh FFS, are they trying to kill the private rental sector? They do realise that there are Landlords out there who rent out a house that it nicer and more energy efficient than their own home? I’ve got a landlord who put in a new oven and washing machine in her rental, and her own is about 10 years old!

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  5. Simonr6608

    I have recently rented a couple of old village cottages, both were band F and only just short of reaching E, there is absolutely no way any improvements can be done for £3,500. EPC recommendations were internal wall insulation, floor insulation and solar panels. Both properties in a conservation area so changing window not a reality, no gas in either village so only option was oil boiler, very expensive so landlord fitted an electric boiler which actually scores very low.

    Where do these people get their costing from, certainly not in the real world and again where is ARLA in all of this certainly not trying to protect an industry they make a lot of money out of

     

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  6. ringi

    Remember this is to get to E,  mostly all it takes is loft insulation and a reasonable gas boiler.    Would any of us wish to live in a home without them?

    (It starts to get harder when D or C is demanded, but that is not coming for some time)

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