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Energy Saving Grants Blog

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Are you an energy-efficient landlord?

More than 400,000 properties in England and Wales could be unlettable because they fail to meet new energy performance standards. Landlords must act now, estate agents warn.

One in 10 rental properties in the UK could be unlettable next year, according to government figures, if landlords fail to improve their energy efficiency.

More than 400,000 properties in England and Wales could be taken off the lettings market because they fail to meet energy performance standards.

From 1 April 2018, privately rented properties must meet new energy efficiency standards or landlords cannot rent them out to new tenants or relet to existing ones.

Landlords should review their properties to check they meet the required standards

The new minimum energy efficiency standards (MEES) come as a surprise to many landlords, one in four of whom do not even know their property’s energy rating, despite needing an energy performance certificate (EPC) by law, according to a recent survey by the energy company E.ON.

Letting agents warn landlords not to put off improvements until nearer the deadline.

“Don’t take things for granted. Since EPCs were first introduced, the standard for achieving an E grade has changed, and landlords and agents should review their properties to check they meet the required standards,” says Dorian Gonsalves, chief operating officer at Belvoir Lettings.

Some landlords may seek to pass on the costs of the improvements to tenants by raising the rent. “However, by carrying out the works, landlords are likely to improve the value of their property and enjoy better relationships with tenants – who, in turn, should benefit from energy bill savings,” says Jeremy Leaf, of Jeremy Leaf & Co estate agency in north London.

Don’t be complacent

Local authorities will be able to impose civil penalties of up to £4,000 for non-compliance. “Landlords who do not have a valid EPC could also face a fine of £200 and may also be unable to serve a Section 21 notice to gain possession at the end of the tenancy,” says Mr Leaf.

Another potentially high cost to landlords is the loss of income while their property is legally unlettable.

Steven Room, head of residential development at property management company Lee Baron, advises landlords not to be complacent about ensuring their property is suitably energy-efficient.

“The first step is to ensure properties have valid and up-to-date EPCs that take account of any changes and improvements made to a building. Once poorly performing buildings are identified, landlords can improve their rating through a few ‘quick win’ energy efficiency measures if not already put in place.”

Missing insulation

Most of a building’s heat is lost through poor sealing of doors and windows, and through poor insulation in the roof and walls. “Checking and renewing, or adding new window and door seals can eliminate drafts,” says Mr Room.

Ensure insulation is installed in attics if it is missing, or thicken existing insulation to reduce heat loss from the roof. Also consider external solid wall insulation - although it is a relatively high up front cost, it will dramatically improve the EPC rating of a property, as well as substantially increase the value of a property.

Before and After image of External Solid Wall Insulation installed on a rental property in Newport, South Wales

Landlords who do not have a valid EPC could also face a fine of £200

Low-energy LED lighting is a quick and easy fix. Smart home technology makes it easier for landlords to manage the energy efficiency of their properties.

“Consider installing a smart meter. You can see the effect of reducing energy immediately via your smart energy monitor, which will help you to make better choices and start saving money,” says Mr Room.

Although the Government has stopped funding the Green Deal Finance Company, which lent money to Green Deal providers, landlords may still be able to get funding from the providers financing the scheme directly.

Some energy companies also offer some help to landlords. Organistations such can help support landlords upgrading their property, including obtaining funding in some cases.

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