The proposals outlined in the 2020 Minimum Energy Efficiency Standards (MEES) consultation are not being taken forward on the proposed time scale. The proposals of the consultation, amongst other things, included raising the minimum band required to let a property, without a valid exemption, from an E to a C by 2025 for new lets and 2028 for existing lets. The proposals would have required the landlord to spend up to £10,000 per property on relevant improvements to reach a C banding; a huge increase on the current required spend of £3,500 including VAT per property. The Government has never responded to the consultation saying what they were going to do.
The consultation proposals have been seen to be a catalyst for some landlords to exit the private rented sector (PRS). This pressure may have been alleviated somewhat although mortgage lenders are still likely to want to raise the EPC rating of properties on their mortgage books and so owners of properties with lower ratings may find it harder to find buyers if their mortgage provider has concerns over EPC ratings.
The energy crisis continues. Tenants will be paying more attention to the EPC rating. It’s likely that landlords with a better EPC rating will, on average, achieve a proportionally higher rent. The consultation acknowledges a higher EPC rating also increases capital values.
We would urge landlords to continue to make relevant improvements where they can. It keeps the property up to date and demonstrates to tenants that they are interested in maintaining the property and spreads the cost of improvements. This Government may have delayed these proposals, but who knows what the next Government’s policy might be.