2018 Energy Performance Regulations - A Landlord Overview

We all want to be greener, more energy efficient, and have warm, comfortable homes that don’t leak heat or let in the cold. If you’re a landlord, though, you now have a responsibility to ensure your rental properties are energy efficient.

The 2018 EPC regulation amendments have now been finalised by the Dept. for Energy & Climate Change. In a nutshell, it means it will be unlawful to let or lease a property (both residential and commercial) that has a poor EPC rating.

The regulations change on April 1st 2018 and cover both domestic properties (from one-room studio flats to detached houses) and commercial property including factories and offices. The changes will be based on the CO2 emissions for commercial property, and on fuel costs for domestic dwellings.

Landlords will only be able to let properties that qualify for a Band E rating under EPC regulations. With an estimated 18% of commercial property falling short of that (and tipping over into the band F or even G ratings), there could be a mad rush to make sure properties comply before April 1st next year. The upgrade costs to make sure properties comply with the regulations could run into the millions.

There’s a very good chance that it will force landlords to trickle down the costs in higher rents not just for those who have to undergo upgrades, but for everyone.

There’s no point trying to offload a property with an F or G rating either, as the new regulations could severely impact on market value. So, with the wind taken out of the resale value, and potentially expensive repairs in order, it could be a tough period ahead for landlords.

The bottom line for landlords is that they will have to make improvements to a building that deliver energy saving effects that can basically pay for themselves within seven years. From lagging pipes to insulating lofts, a lot will depend on the age and condition of the property.

Enforcement falls to local Trading Standards Officers and while the penalties haven’t yet been finalised, non-compliance fines will depend on the rentable value of the property. That could mean fines of anything between £5,000 and £150,000. Providing false or misleading information could result in a further £5,000 fine.

For more information on the new Energy Performance Regulations and how to comply with them contact partner and head of the commercial department, Gillian Jones.


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