What do the New Energy Efficiency Regulations Mean for you?

Given the government’s objectives to achieve energy efficiency savings, it was only a matter of time before new regulations came into place that would impact on landlords. That time has now come with the introduction of the new energy efficiency regulations. The regulations are designed to ensure that significant improvements are made to the UK’s property stock in the coming years.

**Rising energy bills**

Approximately one million tenants are expected to benefit from the changes in the form
of a better insulated home and a reduction in their energy bills. The average dual fuel
energy bill for a typical household in England and Wales in 2004 was £605. By 2010 this
had risen to £1,060, representing a 75 percent increase. By 2020, it is projected the
average energy bill will increase in real terms to £1,250.

However, the million tenants the new regulations are intended to help can pay as much as
£1,000 above the average energy bill, leaving many with little money to make their rental
payments. The rising costs may also make tenants more likely to factor a property’s energy
bill into the total cost of occupation.

**The private rented sector**

According to the latest government statistics, despite a significant improvement in the
energy efficiency of private rented properties in the last few years, the sector still has the
greatest number of properties with the worst performance ratings. In fact, 13.5 percent of
private rented sector properties received an F or G rating on their EPC4.

To increase the number of private rented properties that are falling short of what is
deemed to be an acceptable mark, the government launched the Green Deal and the
Energy Company Obligation. The hope was that these measures alone would provide the
incentive homeowners and landlords need to implement energy efficiency measures.

However, in anticipation that further action would need to be taken, the government has
used its powers under the Energy Act 2011 to create new energy efficiency regulations
specifically for the private rented sector.
What do landlords need to know?

From 1 st April 2016, any tenant living in an F or G rated property will be entitled to
request energy efficiency improvements, which the landlord will be unable to
unreasonably refuse. The landlord will be legally required to implement measures
that improve the property to an E rating, or potentially face a penalty notice.

If a tenancy commences before 1 st April 2018 in a property with an F or G rating,
the landlord is permitted to continue to let the property. However, they must
complete the necessary improvements to bring the property up to an as yet
unspecified rating before a new tenancy commences, or the existing tenancy is
renewed. Although the act does not stipulate what EPC rating the property must
reach, the government has indicated it is likely to be E.

Who will foot the bill?

The good news for landlords is that financial support for energy efficiency improvements is
available through the Green Deal and the Energy Company Obligation . This means
landlords will not necessarily have to spend their own money to improve the energy
efficiency of their properties. Landlords will also only have to make improvements that are
deemed to be cost effective.

If you need any more help or advice about what the new energy efficiency regulations
mean for you, or you’d would like to know more about the most cost effective methods of
improving the EPC rating of your properties, why not get in touch? 01276 691510 or email:
Camberley@martinco.com and we’ll be happy to help.

t: 01276 691510
e: giles.mugford@martinco.com
w: www.martinco.com/lettingsagents/camberley