Rental Property with Poor EPC Ratings to Be Banned

Rented accommodation with poor energy ratings will be banned from the rental market the Government has announced. Reactions have been mixed but with more pressure on tenant finances energy efficiency of homes could prove more and more important over the coming months, but has the Green Deal come too late?

Energy and Climate Change Secretary Chris Huhne announced plans to introduce regulations to ensure that all landlords face minimum energy efficiency standards under the Green Deal.

Under the proposals, announced at the second reading of the Energy Bill:

From April 2016, landlords will not be able to refuse “reasonable” requests from tenants, or local authorities acting on behalf of tenants, to improve their property.

From April 2018, the Government will make it unlawful to rent out a house or business premise which has less than an E energy efficiency rating. The Government says this will ensure that at least 682,000 properties will have to be improved.

The Green Deal is a Government flagship programme which means that from next year, people will be able to access finance to pay for the upfront cost of work which will be paid back over periods of up to 25 years via users’ fuel bills. According to the Government the proposals should “help the most vulnerable as more than a quarter of a million of the worst insulated homes are classed as fuel poor”.

However, landlord bodies have pointed out that tenants may not be happy, or in a few cases even able, to pay higher utility bills to repay improvement grants taken out by their landlords.

Alan Ward, chairman of the Residential Landlords Association, said: “We are concerned that properties improved under the Green Deal will be blighted as a result of tenants being frightened of higher energy charges, particularly as the cost of fuel increases, in order to pay back the deal.”

Ian Potter, operations manager of ARLA, said: Ian Potter, operations manager of ARLA, also expressed  reservations. He said: “The Government’s decision to allow F and G rated properties to remain on the market until 2018 is a practical one, given that around 17% of properties in the private rented sector fall into this category.  This equates to around 500,000 properties.

“However, we remain concerned about the lack of detail on ‘greening’ rental stock.  So far, there is no clarity on how energy improvements will be assessed or enforced – or, importantly, how this assessment will be funded.

“ARLA would like to see the Energy Performance Certificate Register made publicly available so that those properties that do not meet energy efficiency standards can be identified.

“We believe that the Bill in its current form risks disincentivising the lettings market and discouraging landlords from investing in the private rented.”

Ian Fletcher, director of policy at the British Property Federation, said: “Some will also query why the Department is placing so much stall on the private rented , when there are far more carbon emissions emanating from the owner-occupied sector.

“Regardless, it is important that landlords start to consider whether they will be caught and have their plans ready for when the Green Deal goes live next year. The Government has binding climate change commitments and landlords are party to those. There are opportunities, however, as well as threats in improving energy efficiency and landlords who start thinking about and acting on the issues will be best placed to handle both.”

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