Changes in energy efficiency standards for new property lets

The government has set out new plans to make rental properties have at least an ‘E’-rated Energy Performance Certificate (EPC) before they can be rented out.

These plans have been put forward for consultation and are set to be introduced from 1 April 2018 for all domestic and non-domestic new leases. The government has suggested that the new legislation will be phased in, so that landlords who are currently renting out properties will have an extra five years to comply with the regulations.

However, the proposed legislation is causing confusion in the rental sector, as it’s unclear whether rental properties would have to meet such an energy efficiency standard when a lease comes up for renewal.

From April 2018 landlords will only be able to rent out properties that fall below the ‘E’ standard if they have made use of "all available funding or subsidy to make all reasonable improvements" and are still unable to increase the energy efficiency of the property to the required minimum standard.

The consultation of the plans by the Department of Energy and Climate Change (DECC) closes on 2 September 2014. According to the consultation document, 18 per cent of non-domestic properties for private rental currently fall below the proposed new standard, with an EPC rating of F or G.

Scottish energy efficiency standards

Proposed energy efficiency regulations are due to come into force in autumn 2015 in Scotland for commercial properties.

These outline that when a commercial property is sold or rented out the seller/landlord must provide the buyer/tenant with an action on carbon and energy performance plan (ACEP) if the property doesn’t meet 2002 or later building regulations standards.

This ACEP must contain an EPC and an action plan identifying how improvements in energy performance can be made. The buyer/landlord will then have the option of either carrying out the improvements within three and a half years or recording the energy usage of the property over a period of time with a view to reducing energy consumption.

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Published on: August 23, 2014

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