The buy-to-let (BTL) market saw lots of changes in 2017 (taxation of BTL investments and portfolio landlord rules, etc) and there’s yet more regulation coming in 2018.
An Energy Performance Certificate (EPC ) tells you how energy efficient a property is and is rated from A (very good) to G (very poor). It goes without saying that the more energy efficient your property, the lower the energy bills and (usually) the better the overall condition of the house. A high EPC rating also restricts the amount of rent you can charge so keeping up to date with property maintenance work is a good incentive if you want to command the highest yields possible.
Furthermore, EPCs have been a mandatory document for any property rental or sale since 2007 and have a validity of 10 years. As the first of these certificates are coming up for renewal, even stricter energy regulations are being forced upon buy-to-let landlords.
As of 1st April 2018 the Minimum Energy Efficiency Standard (MEES) makes it unlawful to let out a residential property with an EPC rating of F or G (unless exemptions apply). From this date landlords cannot renew or grant tenancies on a property if it does not meet the MEES regulations. Beyond April 2023, the continued private rental of all buildings failing to meet the minimum standard will be outlawed entirely. Local councils will have the power to enforce compliance of the MEES, with penalties of up to £5,000.
The potential risk to landlords (if the property fails to meet MEES) is financial losses and the need to borrow more money to make necessary improvements.
You can view individual EPCs by just entering the property’s postcode here (England & Wales).
There are exemptions to the Minimum Energy Efficiency Standards for landlords, details of which (along with further information about the scheme) can be found on the Government website.
If you are a landlord and would like to explore energy improvements for your rental property, we’d be happy to help you. If you would like to discuss ongoing management of your property (portfolio), we would also be delighted to help. Please call us on 0800 500 3015 or email email@example.com.