Energy Efficiency Requirement Changes for Landlords

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While Prime Minister Rishi Sunak’s recent announcement about watering down the UK’s energy efficiency targets has been seen as controversial by some, what does it mean for business? Currently, according to the Domestic Minimum Energy Efficiency Standard (MEES) regulations, UK landlords are required to hold a minimum EPC rating of E on all their letting properties; an F or G rating means they cannot grant a tenancy to new or existing tenants.


This means that any properties falling under the lower rating need to be upgraded in terms of energy efficiency, to a maximum spend of £3500 per property. That can really add up if you have several properties in your portfolio. Exemptions can be granted for protected properties, but MEES is designed to improve the energy efficiency of the majority of private rentals across the UK, leading to a significant energy saving overall. 

Further amendments to these regulations meant that landlords had to bring all their stock up to an EPC rating of C by 2025 – however, Sunak’s announcement seems to suggest there will be an easing of these regulations, meaning that landlords won’t need to pay an additional amount in upgrades (estimated at £10,000 per property), but will instead simply be encouraged to upgrade their properties wherever possible. 

In addition to his announcement about EPC ratings, Sunak also stated that households will have more time to switch from gas boilers to heat pumps or other low carbon systems, with the phase-out now set to happen by 2035 instead of 2026. Sunak also announced an update to the Boiler Upgrade Scheme, which offers a grant to homeowners covering part of the cost of replacing gas boilers. The grant amount is set to increase to 50%, with up to £7500 per household becoming available. 


So, where does that leave you? As a tenant, it might be disappointing to hear that required upgrades now may no longer go ahead. Increased energy efficiency means more affordable energy bills, something that is becoming a political hot ticket item as many families struggle to make ends meet. Add in rising costs in rent, food and council tax, and it’s easy to see why this latest announcement will frustrate many people.


As a landlord, as long as your property now has an EPC rating of E or higher, it means that no further upgrades will be required by law, potentially saving you thousands of pounds. However, it could still be in your best interest to proceed with energy efficient changes to your property, especially if utility bills are included in your rental cost. And, while it is a landlord’s market at the moment, making your property as energy-efficient as it can be will make it more attractive to potential tenants, helping you to secure the right person for your place. Finally, with a general election looming, a Labour government might reverse Sunak’s decision, meaning you’ll still need to do the work. 

Whether or not you subscribe to the idea of human-led climate change, Sunak’s announcement now leaves homeowners with a choice. Spend the money now to upgrade your property, reduce your energy bills, and access grant funds. Or leave things as they are until after the general election and see how it all shakes out. While it’s good to have options, something to remember is that, when it comes to planets, we only have one.


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