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New legislation to aid energy efficiency

Em Morley - April 23, 2015

New legislation is going to see landlords who let draughty properties to tenants left out in the cold.

From April 2018, landlords with property as either a F or G will be banned from letting them out to tenants in England and Wales, as part of a new initiative aimed at reducing energy bills and carbon footprints.

 

Improvements

Additionally, tenants currently living in properties with an F or G rating will be able to ask for energy efficiency improvements from April 2016. It will then be a legal requirement for all landlords to bring their properties up to at least an E energy rating.

Official government figures show that nearly 10% of the 4.2miliion privately rented houses in England and Wales fall short of the E energy rating. The Government predict that the new legislation will assist over one million tenants, who are thought to pay up to £1,000 more than the average annual heating bill of £1,265.[1] Many experts believe that the extortionate costs are a result of poorly insulated homes, which rival the worst in the whole of Europe.

Penalties

The new legislation will see landlords punished if they do not comply with tenant improvement requests. This will see penalty notices served on unhelpful landlords. Properties with an F or G energy rating will still be able to be let out after 1st April 2018, but only for the remainder of pre-existing rental agreements. However, tenants will not be able to renew a rental contract, nor will landlords be able to let the property out to anyone else, until they have made sufficient improvements that bring the home up to an E energy rating.

New legislation to aid energy efficiency

New legislation to aid energy efficiency

 

Michael Portman, managing director of LetRisks, said that the new legislation ‘will have a significant impact on landlords with older, draughty properties in terms of extra expense and lost rental income, while they improve their properties.’ Portman went on to say that despite this, ‘there will be a range of support mechanisms, such as the green deal and ECO schemes, that could alleviate upfront costs for landlords.’[2]

Insurance

Mr Portman also expressed his concern that landlords with F and G rated properties faced tougher criteria when applying for mortgages and insurance. Most insurance companies require landlords to comply with all relevant statutory requirements, meaning that landlords will have to comply with the new legislation or face major difficulties. Portman said that, ‘landlords and agents are running a risk if they have F and G rated properties and they need to manage this by upgrading and improving their properties.’ He added that, ‘letting agents that have F or G rated properties in their portfolio should be urging their landlords to start work on the properties, to bring them up to scratch.’ Otherwise, he warns, ‘they could face the risk of losing some of their landlords because their properties have become illegal.’[3]

Urgent

Portman believes that, ‘as a matter of urgency, agents and landlords that are currently renting out F and G rated properties should be reviewing the improvements that can be made, as well as researching costs.’ He continued by saying that, ‘agents and landlords should ensure that their properties meet the legal requirements.’[4]

 

[1-4] http://www.propertywire.com/news/europe/uk-landlords-energy-rules-2015042210417.html