The Government has announced that landlords in properties with an energy performance rating of F or G will be expected to pay up to £3500 from next year, in order to improve the energy efficiency rating of the the property.
Since April 2018, landlords who own some of the coldest privately rented homes have been required to improve these properties with energy efficiency measures where support is available to cover the costs.
The new measures, announced today following a public consultation, go further requiring landlords to contribute to the cost of upgrades.
During 2019, properties with an Energy Performance Certificate (EPC) rating of F or G, the lowest two energy efficiency ratings available, must be made warmer by landlords before they can be put on the rental market for new tenancies. This is expected to cost £1,200 on average and will affect 290,000 properties, which represents around 6% of the overall domestic market.
Responding to today’s announcement, RLA Policy Director David Smith said:
“The proportion of private rented homes with the worst energy efficiency ratings of F or G has fallen from 39% in 1996 to 7% in 2016. Whilst good news, we should seek to ensure every private rented property is as energy efficient as possible.
“To help achieve this, the RLA produced recommendations for the Budget, which were ignored, that any work a landlord carries out that is recommended on an Energy Performance Certificate should be tax deductible.
“It is bizarre that, for example, replacing a broken boiler is classed as a tax deductible repair, but this is not the case if a landlord wants to replace an old boiler with one that is more energy efficient.”
In the RLA’s submission to the Autumn Budget 2018, one of the proposals that the RLA had was that any work that a landlord carries out to their properties, that is recommended on an Energy Performance Certificate, should be tax deductible.
According to a Government press release, these new changes are expected to save households an average of £180 a year while reducing carbon emissions and potentially increasing property values with analysis showing the cost to the landlord would be more than offset by the increase in property value.
The law around minimum energy performance certificates
On 1st April 2018, the law changed which means that it is now a requirement for any properties that are rented out in the private rented sector to have a minimum energy performance rating of E, on an energy performance certificate.
This applies to new lets and tenancy renewals AFTER 1st April 2018, and will apply to all existing tenancies from 1st April 2020.
It is unlawful to rent a property which breaches the requirement for a minimum E rating, unless there is an applicable exemption. A civil penalty of up to £4,000 will be imposed for breaches.