It's no joke: energy efficiency changes from April 1st.
21 February 2018
It’s no joke: energy efficiency changes from April 1st
Come 1st April this year, there could be around 400,000 homes in England that can’t be rented out because they waste too much energy. Landlords and surveyors should take note, lest properties in their care are rendered unlettable. Chris Coxon, Head of Marketing at Eurocell, considers the issue.
The new Minimum Energy Efficiency Standards say that all commercial and residential properties must achieve an Energy Performance Certificate (EPC) of Grade E or above to be rented out. That doesn’t mean that there will suddenly be thousands of empty properties and tenants turfed out onto the streets. The rules apply to all new lettings and lease renewals from April 1st, 2018, although they will be extended to existing lettings in April 2020 for domestic properties and April 2023 for commercial ones.
There are exemptions such as some listed buildings, conservation areas or buildings that are deemed to have had as much energy efficiency upgrade work as possible. Very short leases are also exempt which has led to some interesting lease advice from some landlord associations.
However, the thrust of the legislation – which originates from The Energy Act 2011 – is that buildings that are hard to heat, whether poorly insulated, draughty, damp, or all three must be upgraded. Although reducing Carbon to meet Government commitments was the original goal of the legislation, it should also have a positive impact on family finances; around one-third of all poor-fuel households live in the private rented sector.
Currently an estimated 10% of England and Wales’s 4.2m privately rented dwellings currently fall below the E rating: around 400,000 rented properties currently rate only F and G. Government data shows that the average cost for an EPC band G property is £2,860, for a band F property it’s £2,180. That compares to £1,710 a year for an E-rated home.
Property owners, landlords and building managers should look to a property’s EPC for pointers as to what measures would be most helpful for the property in question.
The first thing to address is insulation. Insulating loft spaces – unless used as rooms – is a relatively easy way to cut heat loss, cavity walls can be filled. Solid-walled properties are more problematic; external wall insulation is prohibitively expensive, although inner insulating boards are a possible option as long as they are properly installed to avoid problems with condensation forming behind them.
One point to note is that the Government updated the calculation method used to calculate EPCs at the end of last year to take into account research that said solid walls did not lose as much heat as had been thought. Owners of solid-walled properties might want to commission an up-to-date EPC as the change could push F-grade properties up to an allowable E grade.
Though high-performance replacement PVC-U windows do represent a significant investment, upgrading from single to double glazing will give a property’s EPC rating a healthy boost. One obvious element to seek out when specifying is the British Fenestration Rating Council (BFRC) Window Energy Rating (WER) – which goes from A++ to G: a ratings scheme analogous to that for fridges and washing machines.
Upgrading heating is another way to boost energy efficiency. A new boiler can be a relatively large investment but installing smart controls is another way to provide a smaller – and cheaper – boost to ratings.
Lastly, make sure that you change all those lightbulbs as the EPC assessor will be taking note. LED lightbulbs are cheaper than the older energy saving ones and last longer.
Hopefully, most landlords and building managers will be aware of the approaching changes, since the Government and others have been flagging them up for several years. Remember: there are still two years until all properties must be up to standard, leaving some time to plan and fund the required works around when rent renewals or new leases are due.