Published: 03/12/2020 By TFP
Property Matters Winter 2020When is D really a C
It was always planned that a rise in the minimum energy efficiency standards was on the cards. The indications were that the minimum E EPC rating would be replaced with a D rating in 2025 and to a C rating from 2030. A new consultation proposes a new, accelerated timetable.
Making improvements to the energy efficiency of rented properties is not only beneficial to the tenant but is also good fo the planet, our children and generations beyond. In addition the Government has legislated to bring all greenhouse gas emissions to net zero by 2050.
Following a Call for Evidence in 2018 the Government has launched a new consultation to run until 30 December proposing, in a surprise move, that the increase to band D is skipped and that rented properties should achieve a C rating for new tenancies by 2025 with a three year transition period for existing tenancies.
Other than the benefits listed earlier, the one step process would be less disruptive and would cost landlords less in total, however, there is an obvious issue of affordability.
So what’s it going to cost ?
The landlord of an F or G rated property currently has to pay up to the current cost cap of £3,500 including VAT per property on improvements from the list on the EPC. If having spent that amount the property is still below an E rating than an exemption can be registered.
The proposal is to raise that cost cap to £10,000 per property. This brings into scope the more expensive improvements such as solar; condensing boiler and even heat pumps. It appears that many, if not most, landlords will have to make improvements.
Some if the housing stock is likely to be incapable of ever achieving a C rating and will require what improvements can be made to be made. Bear in mind too that anecdotally, some newly built properties do not achieve a C rating.
The consultation sensibly proposes that heat loss reduction is the first priority and can most easily be achieved through insulation, which is the most effective improvements, as well draught proofing, and efficient doors and windows. These improvements are the less expensive to install.
Ground source heat pumps and other energy generation measures may currently stretch even the £10,000 proposed cap, but in case of a new build property with a D rating they may be the only improvements available. Government estimates that the average property would cost a landlord around £4,700 to achieve a C rating.
Green Homes Grant
Whether this proposal moves forward or not, the direction of travel is clear. The Government has announced a Green Homes Grant scheme open until 31 March 2022, and available to landlords, where they can pay up to two thirds of the cost of the relevant improvements to a maximum of £5,000. The work must be done before the deadline and by a TrustMark registered installer. If property is going to need money spent to improve the EPC rating this will be a very cost effect way to do it.
Currently the EPC is only required when a property is marketed for sale or let. If its 10 year validity expires during the tenancy then a new EPC is not required until next marketing. It is proposed that a valid EPC will be required throughout the tenancy, as per the gas safety record.
It is also proposed to increase the maximum penalty to £30,000 form the current combined maximum of £5,000 as well as giving tenants the right to request improvements and seek compensation for non-compliance.
A further stay on evictions
New regulations for England came into force 17 November 2020 and confirm that, in all but the most serious cases, bailiffs will not carry out evictions or seize property until at least 11 January 2021. With 14 days notice required the first physical eviction will not take place till 25 January.
Anti-social behaviour, and over none months’ arrears that predate 23 March, are among reasons why evictions can take place. The courts will continue to hear possession readings.
This newsletter is produced by the TFP. Whilst the information researched is provided is believed to be correct, no one involved accepts responsibility for accuracy.