The Energy Performance Certificate (EPC) and Minimum Energy Efficiency Standards (MEES) regulations have been in place in the UK for several years, but there are changes coming in 2023 and 2025 that landlords need to be aware of. The rationale for these regulations is to improve the energy efficiency of buildings as part of the government’s strategy to reach ‘net zero’ by 2050.
The current regulations require that properties must have a minimum EPC rating of E before a tenancy can begin.
However, from April 1, 2023, this requirement has become even stricter and now applies to existing tenancies. That means all privately rented properties in England and Wales must have an EPC rating of at least E regardless of when the tenancy commenced. Landlords with properties that do not meet this standard will face hefty penalties and may be unable to continue to rent out their property until it has been improved. This change is expected to affect approximately 280,000 landlords in England and Wales.
The government intends to increase this minimum standard further in coming years. From April 2025 properties must have a rating of at least C when a new tenancy commences. This will later be extended to apply to all let properties not just new tenancies, by April 2028, in the same way to how the government is extending the current E rating requirement to all let properties in April 2023.
Landlords who have properties that do not currently meet the E standard are in the process of making alterations to ensure their properties can continue to be let. Landlords who intend to still be letting those properties in the coming years might decide to make alterations that ensure the property meets the C standard now, rather than meeting the minimum E standard now, to have to make further upgrades in a few years’ time.
There may be exemptions available for landlords who are unable to make the required improvements due to financial or technical reasons. However, these exemptions must be registered with the government and will only be valid for a limited period of time.
Some landlords may be able to get financial assistance via grants and loans to assist with upgrades. Eligibility criteria apply and many of these are regional, local council, and energy company dependant. One example of a national scheme is The Boiler Upgrade Scheme.
If you have any property related finance and tax matters that you need advice on, please do get in touch on 01482 888 820 or email tax@sowerby-llp.co.uk
Published by Sowerby Chartered Accountants, April 2023