Improving the energy performance of privately rented homes: what landlords need to know

As a landlord, what are the key takeaways?

The government is proposing that all privately rented homes in England and Wales reach a Minimum Energy Efficiency Standard of grade C by 2030. Under current legislation, properties are required to have a minimum EPC rating of E.

What do the proposals include?

Under the consultation, the government is seeking to set higher Minimum Energy Efficiency Standards (MEES) against new metrics associated with EPCs. Rather than a letter coding approach, the new metrics would assess the energy performance of a building across three categories: fabric performance, smart readiness and the efficiency and emissions of the heating system.

How would this work?

The government is considering a process which would involve landlords meeting a standard set against the fabric performance, likely to be similar to the requirements of an EPC C grading. Standards set against the heating system metric or the smart readiness metric would also be required. 

Among the outcomes of the proposed policy, the government has highlighted significant savings on energy bills for tenants and the improvement of thermal comfort in private rented homes. 

Putting in place new metrics would involve landlords installing measures which could improve the property’s heat retention as well as lower the energy needed to operate its heating systems. Doing so would mean a tenant or occupier could optimise their energy use and bring down running costs. 

What are the costs involved?

As part of the consultation, the government is requesting feedback on the proposal that landlords will be required to spend up to £15,000 (per property) on improvements which adhere to newly set standards (the ‘cost cap’). Following this they would be able to register a 10-year exemption to continue letting their property if it does not meet the standard. On average, the government anticipates that properties will need £6,100 - £6,800 spent on them in order to satisfy the proposed metric approach.

When would this come into play?

The aim is to raise energy efficiency standards for new tenancies from 2028 and for all tenancies by 2030.

What else do I need to know?

As part of the proposal, ahead of the new EPC system being introduced, privately rented homes which correspond with an EPC C grading against existing EPCs would be deemed as compliant with the higher MEES until the existing EPC expires. Any properties below EPC C after the 2026 reform would be required to commission a new EPC as well as put in place measures to comply with higher standards. 

The consultation remains open until Friday 2 May and feedback can be given on an online form.

Disclaimer: This is not legal advice and should not be relied on as such. If you have any questions, please speak to a solicitor.

Further information

Contact Sapna Fraser

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