Significant energy efficiency changes across both commercial and private rented property is imminent as the UK government has committed, by law, to being carbon neutral by the year 2050.
The Committee on Climate Change states that 18% of UK carbon emissions come from buildings – most of them homes – with a further 15% of emissions coming from electricity consumed in buildings. Many analysts have suggested that given the difficulty of saving carbon in other sectors we are likely to need to come close to a complete decarbonisation of our building stock by 2050.
Getting Homes 2050 Ready
A “2050 ready home” is built to have minimal energy use and net carbon emissions over the year because they are highly insulated, have low water demand and are fitted with or directly connected to renewable energy systems.
The government is ensuring that property builders and investors comply with minimum energy efficiency standards in order to build or let out properties.
Minimum Energy Efficiency Rules Are Changing
As of 1st April 2020, all let properties will be legally required to have an EPC rating of E or above, unless they specifically qualify for an exemption. Exemptions only apply in rare circumstances. Some examples of these exemptions are;
- The work would devalue the property by 5% or more (exemption valid for up to five years)
- The landlord cannot obtain the necessary permission for the work
- The work would cost the landlord more than £3,500 (including VAT).
It is worth noting that existing cost-based exemptions are only valid until the end of this month.
Enforcement of Minimum Energy Efficiency Standards
The minimum energy efficiency standards are enforced by local authorities, and as the local authorities are able to keep the funds from any fines imposed, the likelihood is that these rules will be enforced with a rigorous approach.
The Minimum Energy Efficiency Standards Are Likely To Be Increased in the Future
As it stands, the Scottish government has already taken this one step further, as they have outlined their intention to increase the minimum standard to a D rating by the year 2022. They also plan to raise the cut off point for the amount landlords must spend to meet the standards from £3500 to £5,000.
Demand For Energy-Efficient Buildings
Whilst older properties may have their quirky charm and character – the bottom line is that many of them can come with serious energy efficiency issues – which can not only take a lot of time to fix, but also the money involved in ensuring that standards are being met can mount up very easily.
The unintended consequences of getting energy efficiency measures wrong within older buildings (or doing them badly) include: harm to heritage values and significance, harm to human health and building fabric, and failure to achieve the predicted savings or reductions in environmental impact.
As a result of this, many tenants and buyers are favouring new-build properties, as these homes are designed with energy efficiency in mind, meaning that not only can landlords stay compliant with the law (both now and in the foreseeable future), but are also easy to market to tenants looking to get the best value for their money.
