Rural residential landlords must prepare for expansion of energy efficiency rules

The introduction of the Minimum Energy Efficiency Standards (MEES) regulations has had a noticeable impact on rural businesses with let residential portfolios.

Landlords are prevented from granting a lease to a new tenant or renewing the tenancy of an existing tenant on properties with an Energy Performance Certificate (EPC) of an F or G rating, unless they are eligible to apply for an exemption.

The regulations are part of a push by the government to reduce tenants’ energy bills, further address greenhouse gas emissions and increase overall standards in the private rental sector.

Since the first round of regulatory changes came into effect on 1 April 2018, many landlords have been compelled to carry out improvements to properties or register a relevant exemption in order to continue providing new residential tenancies.

Landlords should be aware that the regulations are set to extend to all existing tenancies from 1 April 2020.

They should also know that the government announced at the end of last year that it intends to make landlords liable for a financial contribution, capped at £3,500, to pay for work to bring any rental properties up to at least an E grade.

With only just over a year to go before this deadline, landlords who intend to continue to let properties that hold an F or G on their EPC need to start planning how they will become compliant with the new regulations.

There are several ways of achieving this – the most obvious being investing in energy efficient improvements to the property.

In certain areas, there may be third-party funding to help with this, but on the whole it is limited in availability and difficult to obtain.

Alternatively, landlords may be able to apply for one of the exemptions on the government’s online PRS exemptions register, although the most recent round of government consultations suggests that these are likely to be further restricted in due course.

With this in mind, it is important landlords stay up to date with the most recent developments and address any non-compliant property before they incur penalties or are forced to leave a property vacant.

To get further information on the different exemptions available to landlords and the evidence required contact your local land management team.