Campaigns Environment, Safety and Standards Helpful Tips Property Management

Energy Efficiency: £3,500 cost cap to take effect from 1st April

Victoria Barker
Written by Victoria Barker

Landlords with properties that have an energy performance rating of F or G will be expected to pay up to £3500 from 1st April, in order to improve the energy efficiency rating of the property.

The majority of landlords will be unaffected by the change, because their properties will already be compliant.

This is because as from the 1st April 2018 it has been a requirement for any properties rented out in the private rented sector (new tenancies) to have a minimum energy performance rating of E on an Energy Performance Certificate (EPC). The regulations will come into force for all existing tenancies on 1st April 2020. 

Exemptions

Currently, landlords can only rent out a property with an F or G rating if they have successfully registered an exemption.  This exemption is usually granted because either the tenant refuses consent for the works or the landlord was unable to get third party funding to cover the costs of the energy efficiency improvements.  So up to now it has never required the landlord to pay for the works themselves.

What’s changing?

From April 1st 2019, landlords in properties with an energy performance rating of F or G will be expected to pay up to £3500, in order to improve the energy efficiency rating of the the property.

Landlords will only be able to apply for an exemption if:

  1. The tenant refuses consent for the works

or

  1. The energy efficiency works will cost more than £3500 (including VAT) out of the landlords pocket

Landlords with existing ‘no cost’ registered exemptions will only remain covered by these until the end of March 2020.

Where upgrades are necessary, the average cost to improve an F or G rated property to a band E is expected to be around £1,200 – far below the upper ceiling being brought forward under new regulations. Examples of measures include: installing floor insulation, low energy lighting or increasing loft insulation. If upgrades will cost more than £3,500, landlords will be able to register for an exemption.

Learn more about energy efficiency

About the author

Victoria Barker

Victoria Barker

Victoria is the Communications Officer for the RLA.

She is responsible for producing articles for our Campaigns and News Centre, the weekly E-News newsletter and media review, and creating social media content. She also contributes to our members magazine, Residential Property Investor.

4 Comments

  • It still seems unclear about Listed Houses which are rented out. There are limits as to what can be done with these anyway but the lack of clarity seems to be whether they need an EPC in the first place. If there is a certificate below E then does this attract further obligations? If so would be best not to have one in some circumstances.

    • Every home that is being let out – whether listed or not – should have an Energy Performance Certificate (EPC).
      Contrary to popular opinion listed buildings are NOT automatically exempt from the new rules – however it could be that the protected characteristics of listed properties prevent energy improvement works being carried out.
      In this case an exemption would be granted.
      Cost could also be a factor – as properties are also exempt if the improvement work would cost more that £3,500. Given the expensive nature of work to listed homes, it could be they would fall into this category.
      If not, landlords would still be expected to do any work permitted, up to this level.

  • I rent out 2 flats in a Grade 2 listed building. I understand Listed Buildings are exempt from EPCs. Should I apply for exemption?

    • Every home that is being let out – whether listed or not – should have an Energy Performance Certificate (EPC).
      Contrary to popular opinion listed buildings are NOT automatically exempt from the new rules – however it could be that the protected characteristics of listed properties prevent energy improvement works being carried out.
      In this case an exemption would be granted.
      Cost could also be a factor – as properties are also exempt if the improvement work would cost more that £3,500. Given the expensive nature of work to listed homes, it could be they would fall into this category.
      If not, landlords would still be expected to do any work permitted, up to this level.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.