Labour has pledged to relaunch the previous government’s plans to make rental homes more energy efficient, and a new consultation could get the ball rolling.
By now, the vast majority of existing landlords as well as many prospective ones will be aware of upcoming potential changes to energy efficiency standards in the private rented sector. The much-debated topic was under the spotlight during the Tory leadership, and remains so since Labour came into power last summer.
Before the targets were scrapped by then-Prime Minister Rishi Sunak back in 2023, there had been a proposal for all rental homes to become more energy efficient (achieving a minimum energy performance certificate, or EPC, rating of C) by 2025 for new tenancies, and by 2028 for existing ones.
While this proposed legislation never made it through Parliament, it had already created some uncertainty in the buy-to-let sector, with reports of some landlords selling their older, less energy efficient properties, while others invested in upgrades in order to gain a higher EPC rating.
Arguably, any moves to improve the energy efficiency of the sector could help to boost the quality of properties on offer, while also having the potential to improve the longevity of an investment in an energy efficient home. This has led to a rise in interest in new-build properties for investment, as they are seen as a more future-proof option.
What’s the latest?
Last week, when asked about the Department for Energy Security and Net Zero’s plans on reinstating the Conservatives’ scrapped plans to improve how energy efficient privately rented homes must be in the UK, energy minister Miatta Fahnbulleh confirmed that the party would be consulting “shortly” on this topic.
She said: “The consultation will include proposals for rented homes to achieve Energy Performance Certificate C or equivalent by 2030.
“In this consultation, we will set out proposals on the exemptions regime for properties that cannot meet the proposed increased standard. We encourage landlords and other key stakeholders to feed into this consultation when it is published.”
Other potential changes on the cards include reducing how long EPCs are valid for, changing how they are calculated, and expanding existing laws to include houses in multiple occupation (HMO) under the same rules.
Energy efficient homes on the way
The Labour party, according to energy secretary Ed Miliband, is offering the UK “the most ambitious climate and energy plan in British history,” and it seems that 2030 is set to be a key year for the country in its progress towards this.
A huge number of changes across many industries are up for review to achieve net-zero, including creating a zero carbon electricity system, and banning the sale of new internal combustion vehicles. Central to its policy is also its Warm Homes plan, involving boosting the energy efficiency of millions of homes across the country.
In the private rented sector, the plan remains very similar as it was under the Conservative government: to ensure all privately rented properties can demonstrate how energy efficient they are by achieving a rating of C or higher on their EPCs.
Current regulations in the UK mean it’s a legal requirement for landlords to obtain an EPC before renting out a property. An EPC is valid for 10 years, and must be provided free of charge to prospective tenants. Failure to comply with this requirement can result in financial penalties and legal consequences, so it’s crucial to ensure that your property has a valid EPC before advertising it for rent.
If new legislation comes into play, this means landlords would need to prove their home’s EPC is rated at C or higher, or they may need to be able to show that they have spent a minimum required amount on improvements and secured an exemption certificate.