With pressure ever-growing on landlords, business owners and the everyday public alike to think about their carbon footprint, energy efficiency standards in properties UK-wide are more important than ever before. Every landlord has to reach a certain energy efficiency standard by law, and understanding what’s expected and how to improve even further could set you apart from the rest. In a competitive market, an energy-efficient home could stand out and give you peace of mind knowing you’re ready for any potential standards changes in the future.
To help you get started, we’re exploring the current minimum energy efficiency standards for Landlords, what they could change to in the near future, and what you can do to meet these standards and improve upon them too.
What Are The Standards?
The MEES (Minimum Energy Efficiency Standard) is a regulation in place that sets a minimum level of energy efficiency for privately rented, domestic properties. These include all properties that are let on specific types of tenancy agreements (e.g. an assured, regulated or domestic agricultural tenancy) or are legally required to have an Energy Performance Certificate (EPC). Most properties that have been marketed for sale or rent, or that have been changed within the last 10 years will require an EPC.
In April 2020, the MEES was updated to state that all properties within the appropriate groups must have a rating of E in order to be let, or to continue being let. Any with a rating of F or G will have to take measures to comply with the regulation or register for an exemption. Currently, the standards only require you to spend up to £3,500 on improvements to get to an E rating, after which you can apply for an ‘all improvements made’ exemption if you still haven’t reached the appropriate rating.
Are These Likely To Change?
Recent proposals from the UK Government have suggested that new EPC regulations are put into place to change the MEES. Planned to take effect in 2025, these changes could see the rating change from a minimum of E, to a minimum of C or above. For Landlords, this could mean a huge cost when the changes come into place in order to meet these standards. In the UK, homes are typically older and therefore less energy efficient, so as a landlord of an older property, you could benefit from improving your energy rating gradually over the next few years.
These changes won’t come into place all at once, however – new tenancies will be expected to have the rating when the change comes in 2025, but existing tenancies can have until 2028 to make the necessary changes. Regardless, the changes will apply to all domestic and private rental properties with a lease length of 6 months to 99 years. Non-compliance could mean fines of up to £30,000, so it’s best to get started with improving your properties now.
As a landlord, you are responsible for a number of improvements and changes within your property, but there are ways you can fund energy efficiency improvements without having to dig into your own pocket entirely. The three main funding options include:
- Third-Party Funding – In some cases, you can get third-party funding for your energy improvements, however, it’s worth noting that the cost cap does not apply in this case. You should use all of the funding on energy improvements to get to band E or above, and can often secure funding from Energy Company Obligation (ECO), local authority grants or Green Deal finance.
- Self-Funding – If you are unable to secure funding, or you want to use your own funds to improve the property, you will fall under the cost cap and will not need to spend anything above £3,500. You don’t have to spend the full amount if you can improve your property to the required band under the given amount.
- Combination – If you can obtain funding but it’s not enough to complete the necessary improvements, or the amount is less than £3,500, you may need to bulk it up with your own costs. You only need to top up with your own funds to the value of the cost cap.
Changes To Consider
While the changes necessary for your property will differ on a case-by-case basis, there are a few suggested improvements that can be made according to the UK Government’s advice. They provide a helpful table with estimated costs, so you can determine which changes are not only the most affordable but which will have the biggest impact on your energy rating:
|Recommended Measures||Indicative Cost||Typical Savings Per Year|
|Internal or external wall insulation||£4,000-£14,000||£195|
|Solid floor insulation||£4,000-£6,000||£122|
|Increase hot water cylinder insulation||£15-£30||£142|
|Low energy lighting||£20||£21|
|High heat retention storage heaters / dual immersion cylinder||£1,200-£1,800||£319|
|Solar water heating||£4,000-£6,000||£57|
|Replace single-glazed windows with low-E double-glazed windows||£3,300-£6,500||£123|
|Solar photovoltaic panel||£5,000-£8,000||£287|
Here at Ashburnham Insurance, we are avid believers that the safety of your rental property is key, not only in terms of energy efficiency but in the protection that you can provide. Our Landlords insurance can protect you against claims made by your tenants in relation to a number of different concerns, as well as help you financially for any repairs, replacements or fees needed along the way. Get in touch to find out more.