How efficient is your let property?

With energy efficiency at the forefront of many discussions and political decisions, the need to consider the efficiency of your let property has never been more important.

The efficiency of a property is calculated through a survey undertaken by an accredited assessor who will subsequently produce an Energy Performance Certificate (EPC) for the property. The need to obtain an EPC has been a legal requirement upon the sale or letting of a property since 1st October 2008. Introduced by the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007, it was later superseded by The Energy Performance of Buildings (England and Wales) Regulations 2012. There is currently no requirement for properties let pre October 2008 to have an EPC, as the current legislation does not apply retrospectively.

Once an EPC has been obtained it has a life span of ten years and even once the EPC has expired, there is no automatic requirement for an updated assessment to be carried out. Under current regulations, a new EPC is only required upon certain trigger events such as selling or letting to a new tenant.

The requirement for a let property to reach a certain energy efficiency standard was latterly introduced through The Minimum Energy Efficiency Standards (MEES). MEES aim to reduce carbon emissions, lower energy bills for tenants, and encourage investment in sustainable property improvements. Established under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015, MEES currently requires landlords to ensure all residential properties that fall under MEES meet a minimum Energy Performance Certificate (EPC) rating of E or higher. Initially applied to new tenancies in 2018, the standards were extended to existing tenancies in 2020.

Properties that are required but fail to adhere to MEES cannot legally be rented unless specific exemptions apply and are registered on the Private Rented Sector (PRS) Exemptions Register. One such exemption is the scenario whereby the landlord has made efficiency improvements to the property up to the current cost cap of £3,500 inclusive of VAT. It is also important to note that not all residential properties currently fall under MEES; it only applies to properties let under relevant tenancies that are legally required to have an EPC.

Obligations and restrictions upon landlords are set to increase further with the Renters' Rights Bill currently going through the House of Lords. The Labour Government have also suggested that they plan to further improve energy efficiency in rented properties, as had previously been mooted by the Conservative Party. The constant evolution of legislation around residential lettings means it is imperative landlords understand their obligations and take advice where required.