The UK government is intensifying efforts to enhance energy efficiency in privately rented homes across England and Wales following a 2020 consultation.
A further consultation took place on 7 February 2025, outlining several pivotal proposals aimed at improving energy performance in the sector.
Why raise the minimum energy efficiency standard?
Currently, privately rented properties must achieve a minimum Energy Performance Certificate (EPC) rating of E. The proposed plan seeks to elevate this standard to a C rating. This change is driven by the government's commitment to achieving net-zero emissions and addressing fuel poverty. Approximately 24% of privately rented homes in England are classified as ‘fuel poor', improving the energy efficiency of these homes will not only be better for the environment, but will also lead to cheaper energy bills which is important to many in the current climate.
Currently, it is estimated that 48% of privately rented homes in England are already achieving an EPC C rating or above, however, there is still a long way to go.
When will the EPC changes take effect?
The implementation is designed to be gradual:
- From 2028 new tenancies must comply with the EPC C rating.
- From 2030 all existing tenancies are required to meet the new standard (EPC C).
This phased approach offers landlords a reasonable timeframe to undertake necessary upgrades.
What are landlords expected to do regarding EPCs?
Landlords are encouraged to focus on improving the “fabric performance” of their properties. This involves enhancing elements like insulation, windows and switching lighting to LED to reduce energy consumption. The government suggests that such improvements will likely align with achieving an EPC C rating under current assessments.
Is there financial support for landlords?
The government recognises the financial implications this will have for landlords, and therefore proposes a ‘spending cap' of £15,000. Landlords would need to invest up to this amount in energy-efficient improvements for each property before financial support would be available.
Landlords are encouraged to first install measures such as insulation in lofts and walls, and/or double gazing before moving on to improvements such as smart meters and solar panels as the former will have a greater effect on energy performance.
Once £15,000 has been spent, an exemption could apply, but only if the property still falls below the EPC C rating. This exemption states that following £15,000 being spent on improvements to meet the new required standard, landlords can apply for a 10-year exemption to continue to let the property if it does not meet an EPC rating of C.
An affordability exemption has also been proposed. This would lower the investment cap to £10,000 and could potentially be applied to arears of lower rents and council tax bands.
If you are a private landlord, it is also worth noting that you may be able to benefit from the governments Boiler Upgrade Scheme and Warm Homes: Local Grant which is to be delivered later this year, so keep an eye out for this.
How will existing EPCs be treated?
Whilst the government is reforming EPCs with new metrics planned to come into force next year, properties with a current EPC rating of C will be considered compliant until the certificate expires. For properties below this rating, landlords will need to obtain a new EPC when the higher standard becomes applicable in 2028 or 2030, depending on the tenancy.
What are the potential benefits for tenants?
Improving energy efficiency can lead to:
- Lower Energy Bills: Enhanced insulation and energy-saving measures reduce heating costs.
- Improved Living Conditions: Warmer homes contribute to better health and comfort.
The government estimates that these changes could save renters an average of £240 per year on energy bills.
How can stakeholders provide input?
The government is seeking feedback on these proposals. Stakeholders, including landlords, tenants, and industry professionals, are encouraged to submit their views by 2 May 2025. Details on the consultation process can be found on the official government website.
Conclusion
The proposed enhancements to the Minimum Energy Efficiency Standards represent a significant step toward sustainable housing in England and Wales. While the goals of reducing carbon emissions and alleviating fuel poverty are commendable, the success of these measures will depend on balanced implementation that considers the financial realities of landlords and the positive effect these changes will have on tenants.
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