Campaigns Environment, Safety and Standards

Landlords with F or G rated properties to pay up to £3500 to improve energy efficiency rating

Victoria Barker
Written by Victoria Barker

The Government has announced that landlords in properties with an energy performance rating of F or G will be expected to pay up to £3500 from next year, in order to improve the energy efficiency rating of the the property.

Since April 2018, landlords who own some of the coldest privately rented homes have been required to improve these properties with energy efficiency measures where support is available to cover the costs.

Most landlords will be unaffected by the changes as their properties are already compliant. 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.

The new measures, announced today following a public consultation, go further requiring landlords to contribute to the cost of upgrades.

However, most landlords will be unaffected by the changes as their properties are already compliant. 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.

During 2019, properties with an Energy Performance Certificate (EPC) rating of F or G, the lowest two energy efficiency ratings available, must be made warmer by landlords before they can be put on the rental market for new tenancies. This is expected to cost £1,200 on average and will affect 290,000 properties, which represents around 6% of the overall domestic market.

Responding to today’s announcement, RLA Policy Director David Smith said:

“The proportion of private rented homes with the worst energy efficiency ratings of F or G has fallen from 39% in 1996 to 7% in 2016. Whilst good news, we should seek to ensure every private rented property is as energy efficient as possible.

“To help achieve this, the RLA produced recommendations for the Budget, which were ignored, that any work a landlord carries out that is recommended on an Energy Performance Certificate should be tax deductible.

“It is bizarre that, for example, replacing a broken boiler is classed as a tax deductible repair, but this is not the case if a landlord wants to replace an old boiler with one that is more energy efficient.”

Budget Submission

In the RLA’s submission to the Autumn Budget 2018, one of the proposals that the RLA had was that any work that a landlord carries out to their properties, that is recommended on an Energy Performance Certificate, should be tax deductible.

According to a Government press release, these new changes are expected to save households an average of £180 a year while reducing carbon emissions and potentially increasing property values with analysis showing the cost to the landlord would be more than offset by the increase in property value.

The law around minimum energy performance certificates

On 1st April 2018, the law changed which means that it is now a requirement for any properties that are rented out in the private rented sector to have a minimum energy performance rating of E, on an energy performance certificate.

This applies to new lets and tenancy renewals AFTER 1st April 2018, and will apply to all existing tenancies from 1st April 2020.

It is unlawful to rent a property which breaches the requirement for a minimum E rating, unless there is an applicable exemption. A civil penalty of up to £4,000 will be imposed for breaches.

Interested in learning more about energy efficiency?

About the author

Victoria Barker

Victoria Barker

Victoria is the Communications Officer for the RLA.

With a degree in Journalism, she is responsible for producing articles for our Campaigns and News Centre, the weekly E-News newsletter and creating social media content.

Before joining the RLA, Victoria worked in the University of Salford’s press office, and during University she represented Smooth Radio at events across the North West, as a member of the street team.

3 Comments

  • Great report – very clear and comprehensive. The only point I would make is that while there is practically no interest or even awareness from most tenancy applicants or purchasers the theoretical increase in value from energy efficiency improvements is just that – theoretical. Unless government takes measures to increase knowledge of and interest in EPC ratings this will sadly continue to be the case. It certainly won’t stop me personally taking measures to improve the energy efficiency of my properties, but that is because I want to rather than because of the way in which these muddled and piecemeal measures are put in place.

  • How ironic to hear on Radio 4 this morning that thousands of “social” houses are having their cavity wall and external insulation removed at vast expense, because they were installed so poorly and have led to massive problems with water penetration “damp”. Anti-PRS campaigners are always bleating about the supposedly higher standard of social housing, so I wonder how they can explain the slump in average energy ratings this scandal will expose?

    Of course the original cowboy installers have often conveniently gone into administration, invalidating any guarantee, and the trade redress scheme is totally ineffectual.

    Does the RLA have any figures on the extent of this problem for private sector landlords? If not – or to update its knowledge in the light of the recent revelations – would the RLA consider doing a survey of members, perhaps at the same time as the NLA, so we get a better sample size and joint opportunities for publicity?

    Of course anyone’s who paid privately for these insulation measures will be ignored or even laughed at by the anti-landlord brigade, and told it’s a problem between them and their contractor. But if private landlords have used Green Deal contractors or others recommended by their energy company or the Energy Saving Trust, for example, then there are serious questions to be asked about the waste of public money involved and the lack of oversight on these supposed high-quality approved contractors.

    Landlords may be a generally-despised class of people, but we are also private citizens using the same insulation schemes as the general public, and we are all paying for this through an extra £80-100 in green taxes on our fuel bills. If the PRS is experiencing the same problems as the social providers highlighted by the BBC today, then it’s likely there’s similar rarely-reported problems for private citizens too. And if the PRS isn’t having anything like the same problems, serious questions will have to be asked about the quality of the contractors and the specifiers employed by councils and housing associations.

Leave a Comment

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