Landlords haven’t exactly had it easy over the last couple of years, and there are still more changes up ahead. In April next year (2018), new Minimum Energy Efficiency Standards are set to come into play, and those who are renting out property will need to take special care if they are to continue operating as landlords.
What are Minimum Energy Efficiency Standards?
The Minimum Energy Efficiency Standards will be introduced in the hope that it will lower greenhouse gas emissions as the government strives to meet its carbon reduction targets and that rented accommodation is brought up to a certain level of habitability for tenants. While this will not affect the vast majority of decent landlords who take good care of their properties and their tenants, it’s still something that everyone who has a buy-to-let investment should be aware of.
The Minimum Energy Efficiency Standards will come into force from April 1st 2018, and the changes will mean that all properties being put up for private rent will need to have a minimum Energy Performance Certificate (EPC) rating of E. Should your property not be up to these standards, you will be committing a criminal offence and you’ll face the consequences of such should your failure to meet the new regulations be brought to light.
An important point to remember is that the new Minimum Energy Efficiency Standards will only apply to tenancy renewals or new lets offered after April 1st. Landlords with existing tenancies will be have a little more time to get their house in order, but they must meet the new criteria by April 1st 2020.
Punishment and penalties
Non-compliance with the new Minimum Energy Efficiency Standards will result in landlords being punished by the local authority that governs the area in which the property stands. Councils will be in charge of enforcing the new standards and will be serving compliance notices to anyone thought to be in breach of the rules once they come into force.
Should the landlord in question not meet the criteria laid out in the compliance notice within the given time frame, a penalty notice will be issued. The penalties are thought to be in accordance with the property’s value and the length of time the tenancy has been in place. For tenancies under three months, a 10% levy will be charged with a minimum fine of £5,000 heading all the way up to a maximum of £50,000.
For those in breach of the Minimum Energy Efficiency Standards for a period of three months or more, the fine will increase to 20%, with the minimum and maximum rising to £10,000 and £150,000 respectively.
What this means for landlords
After the recent changes to Stamp Duty and tax relief, landlords have been left reeling a little, and the introduction of the new Minimum Energy Efficiency Standards will no doubt leave them feeling aggrieved once more.
For those who own non-compliant buildings, the cost of bringing them up to date could be substantial. Then there’s the potential void period should the property not be fit to be placed onto the market, which could put some landlords into serious financial difficulty.
What landlords should be doing about the Minimum Energy Efficiency Standards
The key takeaway is that landlords should be acting NOW if they want to avoid penalties and costly void periods which could seriously impact their businesses. These changes are under a year away (and we all know how quickly that can slip by), so it’s vitally important to assess your situation immediately and begin taking steps to protect yourself before the date arrives.
How you choose to improve your EPC rating is largely up to you, providing it meets the minimum E standard laid out in the new rules. Simple things such as improving insulation, installing double glazing, fitting LED lighting, and switching to a more efficient boiler can all move the needle in your favour. Finding the most cost-effective way to hit the new Minimum Energy Efficiency Standards will obviously be in your interest, so start planning for it now and avoid being forced into decisions that could adversely affect your income as a landlord.
If you would like to discuss anything to do with letting a property or becoming a more successful landlord, give our friendly team a call today on 020 8989 2091 or email us at This email address is being protected from spambots. You need JavaScript enabled to view it.
As Petty’s MD, John steers the ship. He is, however, first to admit that the team around him run the show, and he’s incredibly proud of each and every one of them. Sporty and studious, caring and loyal, John is a father of two wonderful children (and Cooper the dog).
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