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Regulation changes to make homes more energy efficient are an integral part of the government’s plan to reach Net Zero by 2050.
The changes also mean that tenants will pay lower utility bills as they consume less energy.
Minimum Energy Efficiency Standards (MEES)
Minimum Energy Efficiency Standards (MEES) in the residential Private Rented Sector (PRS) apply to privately rented domestic properties in England and Wales.
The aim of MEES regulations is to improve the energy efficiency and quality of privately rented homes, in line with the UK government’s targets for decarbonisation.
A property’s energy efficiency rating is recorded on an Energy Performance Certificate (EPC), ranging from A (most efficient) to G (least efficient). Since 1st April 2020, landlords in the residential PRS sector can no longer let or continue to let properties covered by the MEES Regulations if they have an EPC rating below E, unless they have a valid exemption in place. Landlords face financial penalties of up to a maximum of £5,000 per property for non-compliance.
Under new rules, set to become law in 2025, landlords of privately tenanted properties will need to ensure that their property scores at least an EPC C rating in order to let it out on a new assured tenancy. From 2028 the EPC C law will apply to existing tenancies also.
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Exemptions
Where an exemption applies, the exemption must be registered by the landlord (or an agent for the landlord) before it can be relied on; this registration is made on a self-certification basis and an exemption will apply from the point at which it is registered.
The PRS Exemptions Register is for properties which:
- Are legally required to have an EPC.
- Are let on a relevant tenancy type.
The PRS Exemptions Register also applies to properties that cannot be improved to meet the minimum standard of EPC band E for one of the reasons set out below:
Cost Cap: The prohibition on letting property below an EPC rating of E does not apply if the cost of making even the cheapest recommended improvement would exceed £3,500 (inc. VAT). 3 quotes need to be submitted with this exemption application.
All Improvements Made: Where all the “relevant energy efficiency improvements” for the property have been made (or there are none that can be made) and the property remains sub-standard.
Wall Insulation: This mainly applies to listed buildings. A copy of a written opinion from a relevant expert is required, stating that a property cannot be improved to an E rating because the recommended wall insulation measure would have a negative impact on the property.
Third-Party Consent: Certain energy efficiency improvements may require third-party consent before they are installed on the property. This may be required from a tenant, local authority, mortgage lenders etc. Landlords will need to supply a copy of any correspondence demonstrating that consent for energy efficiency measures was required and sought and that this consent was refused in order to register for this exemption.
Property Devaluation: Where all the recommended energy efficiency measures would lead to the property being devalued. An independent RICS surveyor’s report is required, to confirm that the installation of a measure would devalue the property by more than 5%.
Temporary exemption due to recently becoming a landlord – this only last 6 months and only occurs in certain situations.
The benefits of a good EPC rating
In addition to comlying with current and forthcoming regulations with regards to EPCs, making the required changes to your rental property will reduce tenants’ energy bills. This can only benefit both current and future tenants.
If you would like to learn more, please contact our team who are more than happy to answer any questions or queries you may have.