The government has reaffirmed its goal to create a more energy efficient rental sector, with details about EPC requirements ahead of the 2030 deadline taking shape.
More details have been released concerning the UK government’s ‘Plan for Change’, which aims to enable households across the country benefit from cheaper bills and warmer homes in the private rented sector.
For landlords, the news is not particularly new – the Conservative government had been targeting energy efficiency and higher energy performance certificate (EPC) ratings in the sector for a number of years, having already raised the minimum EPC rating threshold for rental homes to an E.
According to energy secretary Ed Miliband, the measures being proposed to improve energy efficiency standards in rental properties could save tenants £240 per year through cheaper bills, by ensuring private landlords “are investing in their properties, building on the good work of many to upgrade their homes to EPC C or higher already.”
What Miliband is referring to is the fact that many property investors and landlords have already improved the EPC ratings of their property portfolios, through either upgrading existing homes or by ditching older, less efficient property and reinvesting in newer, better equipped buildings – including new-builds which hold the highest energy performance credentials on average.
EPC ratings already improving
According to the latest data, almost half (48%) of privately rented homes in England already achieve a rating of C or above, which is the anticipated minimum target for all rental homes by 2030 at the latest – up from the current minimum of E.
This might mean landlords in possession of properties rated D or E must invest in things like loft insulation, cavity wall insulation, solar panels, smart meters and double glazing, “ensuring homes are warmer and more affordable for tenants”.
Separately, research has already shown that tenants are increasingly taking EPCs into account when looking for a rental property. All homes rented out in England and Wales must come with a current EPC, which must be reassessed and renewed every 10 years, but can be done sooner if upgrades are made and a new certificate is required.
This has led to a greater number of property investors and landlords also thinking more about the energy efficiency of their homes, in order to avoid a so-called ‘brown discount’, where lower-rated properties see a fall in their rental value through lack of desireability from tenants.
With the new deadline from the government becoming more likely, many investors will already be reassessing their portfolios, with future investments more likely to centre on the most energy efficient housing stock, including new-build homes.
Government is seeking views
The government is asking for landlords and tenants to share their views on the planned increase to energy efficiency standards in the private rented sector that will mean cheaper bills and warmer homes for tenants.
It will aim to offer landlords “a choice over how to meet energy efficiency standards”, with proposals also including a maximum spending cap of £15,000 for relevant upgrades to improve property ratings, along with an affordability exemption that could lower the cost cap to £10,000.
Commenting on the UK Government’s plans, Timothy Douglas, Head of Policy and Campaigns at Propertymark, said: “This consultation and the proposals to extend the Minimum Energy Efficiency Standards for the private rented sector in England and Wales have long been anticipated.
“However, Minister Miliband must realise it’s not about fighting landlords and people on climate change; it’s about creating realistic and achievable energy efficiency targets that acknowledge the challenges our housing sector faces in adapting and making the necessary improvements in an affordable way.
“Landlords are part of the solution, but the UK Government must listen and support them as housing providers. Failure to do so alongside adequate and sustained grant funding, will only mean that property will not be available to rent, and tenants lose out when there is huge demand for rented property across the country.”
You can learn more and respond to the consultation here.
If you’re a property investor or landlord looking to upgrade your property portfolio with top-EPC rated properties, get in touch with BuyAssociation today to find out more about our exciting off-plan and new-build investment opportunities.
