Landlords should be reviewing and improving the energy efficiency of the homes they let NOW – as tighter rules will still come
By Helen Everritt, Manager, Gro Residential Management
In our work at Gro Residential Management we always pride ourselves on not being reactive – but proactive – and we always encourage the landlords we work for to be the same.
So, when it comes to the management of their portfolios, through our complete commitment to compliance and high standards, we encourage regular maintenance which can be managed on an efficient and planned budget, with the aim of avoiding sudden, unwanted costs.
It’s a case of not only looking down the road, but also at what may be around the corner.
In that respect, the issue of the energy efficiency of homes on the rental market is one which could very soon be one of huge significance for landlords, especially those with large portfolios of homes they rent out.
Indeed, the Government was until recently planning to change the law in 2025 to enforce much higher standards when it comes to the energy efficiency of homes rented out – a proposed law changed which panicked many landlords – and one they were certainly relieved to see taken off the table in September.
Landlords now have time to act
At present, properties are assessed for their energy efficiency and given an Energy Performance Certificate (EPC) which rates them. A property’s energy efficiency standard is measured from ‘A’ to ‘G’, with ‘A’ being the highest level of energy efficiency and ‘G’ being the lowest.
Since April 1, 2020 all privately let properties in England and Wales have had to meet a minimum Energy Efficiency Standard (MEES) of ‘E’. If a property does not meet the minimum ‘E’ standard, it cannot be let without a valid exemption.
Local authorities are responsible for enforcing EPCs and can issue penalties for properties that do not meet the minimum standard up to £4,000 for renting out a non-compliant property for three months or more.
Under the recent proposed law changes, the Government was planning to make any newly let property in the private rental sector require an energy performance certificate of C or higher, from April 2025. Properties with existing tenancies would have needed to comply by 2028.
It was a proposed change which almost a fifth (18 per cent) of landlords in a survey anticipated would cost them £10,000 or more to upgrade their properties, while a quarter (25 per cent) expected them to cost between £5,000 and £10,000.
Planning property energy improvements into a portfolio budget
Whilst there may be a reprieve for now, it’s likely that it won’t be too long until the issue of improving energy efficiency in the residential rental sector is back on the political agenda, as it is widely felt that properties which only meet an ‘E’ standard are not suitable, as they cause higher heating and lighting bills for tenants.
The plan could quickly be reinstated, for example under a change of government, so it is wise for landlords to assess their property portfolios now and start planning works which will help improve energy performance.
By carrying out an energy audit, opportunities which don’t cost the earth, but can improve efficiency, can quickly be identified, from adding attic insulation to replacing incandescent bulbs with energy-efficient LED lights.
Other changes, such investments into solar panels, new windows and doors, high-efficiency heating, ventilation, and air conditioning (HVAC) systems, programmable thermostats and smart home devices which monitor and control energy usage will of course require more financial planning, but should certainly be part of a landlords considerations given the fact that energy efficiency and cost will always remain high on the Government’s list of priorities.
At Gro Residential Management, our commitment to ensuring all properties are compliant means we plan not just for today on behalf of the landlords we represent, but also long term and well into the future, keeping portfolios as profitable as possible, even when the rental landscape changes.