Buy-to-let landlords can't claim a funding exemption from making their properties more energy-efficient – meaning they could be responsible for improvement costs as high as lb3,500 and fines of up to lb5,000 when they neglect to make necessary changes.
In April 2022, rules arrived requiring privately rented properties to have a minimum energy performance certificate (EPC) rating of E, but some landlords were exempt from having to enhance their properties.
As of 1 April this year, landlords who cannot secure government funding to help bring their properties as much as an E rating can't claim this exemption, and will have to pay for try to be achieved themselves.
Here, we explain exactly what the regulations mean, outline energy efficiency improvements you can make, and reveal further rule changes coming in the next few years.
What are the energy efficiency rules for buy-to-let landlords?
The Minimum Energy Efficiency Standards (MEES) were introduced in April 2022, requiring rented properties with new or renewed tenancy contracts to have a minimum energy performance certificate (EPC) rating of E.
Landlords who fail to comply could face fines as high as lb5,000.
Until this month, landlords could register for the 'no cost towards the landlord' exemption, which meant that they didn’t have to make improvements if it could leave them out of pocket. However, this exemption was lifted on 1 April.
Landlords with properties rated F or G for energy efficiency will have to cover the price of improvements up to and including cap of lb3,500 when they can't find alternative funding.
Exemptions are still in place for properties which will are more expensive than lb3,500 to bring as much as standard, but landlords can always have to pay for improvements as much as that cap.
How much do energy efficiency improvements cost?
While lb3,500 is not an insignificant sum, it’s worth noting that just several buy-to-let owners will face costs this high; it costs typically lb1,200 to upgrade older properties to an EPC grade E.
For context, EPC ratings vary from A (best) to G (worst). New-build homes tend to have high EPC ratings, while older homes often have lower ratings of D or E.
The average EPC rating for a UK house is D – so landlords aren’t being asked to make properties anymore energy-efficient compared to average home.
How long does an EPC continue for rental properties?
EPCs are valid for Ten years. If you aren't sure when yours must be renewed, you can look up in the EPC register, a government database of every EPC in the united kingdom.
The EPC register is another easy way check how energy-efficient a house is that if you're considering buying it – and for that reason, whether you likely will incur extra costs to enhance its EPC rating.
How to improve your EPC rating
If your property continues to be given an EPC rating of F or G, you will see a list of methods to enhance the property, along with general costs of what you'll need to spend on the job.
Common recommendations include:
For help funding home improvements for energy efficiency, you might be able to get financing in the Green Deal Finance Company – an alternative to the original government-backed Green Deal scheme, which closed in 2022. Our guide on The Green Deal explains the salt water evaporates.
Further EPC regulation alterations in 2022
Landlords with existing tenancies may have avoided having to make any energy efficiency changes so far, but which will vary from the coming year.
From 1 April 2022, MEES will apply to all tenancies, no matter when the lease was granted.
This means that all landlords will need to make sure their properties adhere to the guidelines – and, if this applies to your buy-to-let, it would be a good idea to start making an agenda how to make certain you're all set for that deadline.
From 1 April 2023, the guidelines will be rolled out to tenanted commercial buildings.
Are any properties exempt from MEES?
There are a few properties that don't require an EPC, including:
Here is the full list of exempt properties – many aren’t applicable to buy-to-let landlords.