Consultation on Minimum Energy Performance of private rented property

Since 1 April 2020, subject to a limited number of exemptions, it has been unlawful for a landlord to either newly let or continue to let a domestic private rented property with an EPC rating of F or G. However, even that most recent change was against the backdrop of The Domestic (Energy Performance) Bill 2019-2020 requiring that a framework be established to ensure that in the near future, domestic properties have a minimum energy performance rating of C.

Accordingly, on 30 September, the Government opened its latest consultation seeking views on the proposal to amend the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (the Regulations) in order to significantly improve the energy performance of private rented sector homes over the next 10 years. 

The proposals focus on:

• Delivering significant emission reductions
• Decreasing bills for low income and vulnerable tenants
• Increasing the quality value and desirability of landlords’ assets
• Reducing energy bills for tenants and ensuring warmer homes
• Supporting investment in high quality jobs and skills in the domestic retrofit supply chain
• Providing greater energy security through lower energy demand on the grid and reduced fuel imports.

The detailed proposals are set out in Chapters 1, 2 and 3 of the Consultation:

Chapter 1 outlines the Government’s preferred policy scenario for improving the energy performance of privately rented homes, comprising four elements:

1) raising the energy performance standard to Energy Performance Certificate (EPC) energy efficiency rating C;

2) a phased trajectory for achieving the improvements for new tenancies from 2025 and all tenancies from 2028;

3) increasing the maximum investment amount, resulting in an average per-property spend of £4,700 under a £10,000 cap; and

4) introducing a ‘fabric first’ approach to energy performance improvements.

Chapter 2 considers the wider context for the proposals, including an alternative more stringent policy proposal, seeking views on ensuring the quality of any energy performance improvement works undertaken and on taking further action in the future for the 2030s.

Chapter 3 seeks views on how the Government can support landlords through encouraging compliance with the Regulations. It also sets out suggestions of ways to strengthen enforcement options and amend the existing exemptions framework, by, for example: placing a requirement on letting agents and online property platforms to only advertise and let properties compliant with the Regulations; requiring landlords to provide an EPC prior to a property being advertised; and increasing the maximum financial penalty a Local Authority may impose on a non-compliant landlord per property and per breach of the Regulations to £30,000.

The Government’s Response to the consultation is expected in spring 2021 with the related amendment to the Regulations planned for autumn 2021.

There is a clear commitment by the Government and impetus to substantially improve energy performance in this sector and it is evident that this focus will continue and no doubt intensify to achieve the EPC C standard.  This consultation closes on 30 December 2020 and all those interested are encouraged to respond. A copy of the consultation can be found here.

For more information, please contact Naomi Heathcote on +44 (0)20 7427 6432 or at naomi.heathcote@crsblaw.com.