What do new Minimum Energy Efficiency Standards (MEES) mean for landlords in Brighton and Hove?
Recent changes to Minimum Energy Efficiency Standards (MEES) are a crucial step in helping the UK Government meet its carbon emissions targets, and will have a big impact for landlords in Brighton and Hove.
To achieve the target of reaching net zero carbon by 2050 a huge amount of work is needed to upgrade the country’s ageing and inefficient buildings which are currently responsible for 34% of all emissions.
To encourage property owners to undertake energy performance improvements, the Government is placing restrictions on the ability to lease any property which has an Energy Performance Certificate (EPC) of F or G.
Measures coming into force today will require landlords to install energy efficiency upgrades in the coldest privately rented homes, saving tenants money on bills and cutting emissions https://t.co/bPn7rJSrD2 #CleanGrowth #IndustrialStrategy pic.twitter.com/gkNzhfMtk8— Dept for BEIS (@beisgovuk) April 1, 2019
The new standards have been gradually phased in. Properties with an EPC of F or G:
> cannot be let for new tenancy agreements from 1st April 2018
> cannot continue to be let for a domestic lease from 1st April 2020
> cannot continue to be let for a non-domestic lease from 1st April 2023
Where a landlord wishes to continue letting a property which does not meet the minimum standard they will need to make improvements that bring the energy performance up to at least an E rating.
What is the energy performance certificate (EPC) of your property?
Average Energy Performance Certificate (EPC) ratings for domestic properties in the UK:
You can check the EPC of any property in just a few seconds by visiting the national EPC Register:
Who is going to pay for all these energy improvements?
From 1st April 2019 landlords are required to invest up to £3,500 to improve the EPC of their properties up to at least an E.
In situations where the work required will cost more than £3,500, landlords will be obliged to research and explore all available grants and funding offers which may include:
- Energy Company Obligation (ECO)
- Green Deal
- Funding from central government, a local authority, or a third party.
Access to these funding streams is dependant on a number of factors such as the potential vulnerability of the tenant, the nature of the work required, and the condition of the property in question.
Exemptions from MEES
In some circumstances a landlord may be able to claim an exemption from MEES and continue to rent their property despite failing to meet the new standards. Examples can include an inability to secure adequate funding, or where the property remains below an E despite improvements having been made.
Some listed buildings are also exempt but only where work will unacceptably alter the aesthetic of the building.
Enforcement and Penalties
MEES regulations will be enforced by Brighton and Hove Trading Standards and Council Health and Safety Officers.
Non-compliance can lead to a fine from £5,000 and £50,000 for an initial three months, rising to between £10,000 and £150,000 for prolonged infringements. Furthermore, landlords found to have breached regulations will be named and shamed on a public register.
Importance of having an accurate and up-to-date EPC
With an EPC score determining the ability for properties to be rented or not, it is vitally important that certificates are up to date and accurate.
In 2012, several improvements to the EPC procedure made the methodology of assessment more rigorous and reliable. This means that what passed for an E in 2010 might not do so now. Therefore we advise all landlords to check that their EPCs are recent, and to request a new survey where needed.
Failure to meet with new standards could result in loss of income and reputational damage, not to mention the headache of dealing with fines and a rush to make required improvements.
Property owners should also consider the financial implications of continuing to hold stock that is below market expectations for energy standards.
Our advice is to take the time now to research available funding and make necessary improvements before this becomes a serious issue.
Why landlords should act now to reduce exposure to the new Minimum Energy Efficiency Standards
It is widely accepted that in order to comply with its own carbon emissions reductions targets, the Government will raise the Minimum Energy Efficiency Standard for rental properties to D around 2026, and then again to a minimum of a C rating by 2030.
Therefore landlords and Buy-To-Let property investors should consider the potential implications for E-rated buildings and take advantage of available funding opportunities that will improve their properties at no cost.
Specific funding available for landlords in Brighton and Hove
Brighton and Hove City Council is offering low-income and vulnerable households the option to make improvements to their property at no cost as part of the Warm Safe Homes Grant.
This grant of up to £5,000 is available where the tenant is considered to be at risk of fuel poverty as measured by the ‘Low Income High Costs’ indicator (i.e. they have fuel costs above the national average & spending this amount leaves them with an income below the official poverty line), or where the household is in receipt of Housing Benefit or any of the other ‘passporting benefits’.
A maximum grant of £20,000 can be considered to cover costs arising from:
> electrical and gas safety checks and repairs
> repairs or modifications to stairs, floors and steps
> safety and security repairs
> boiler repairs or replacement loft/cavity wall insulation, including loft clearance.
For further details see the Brighton and Hove City Council document regrading the scheme: https://www.brighton-hove.gov.uk/sites/brighton-hove.gov.uk/files/DFG%20Policy.pdf
Why MEES matters - Conclusions
The new Minimum Energy Efficiency Standards are the first step in a long-awaited package of measures designed to improve the housing stock of Brighton and Hove, the county of Sussex, and the whole of the UK.
Landlords, Buy-To-Let investors and property owners must ensure that all properties are up to a minimum energy efficiency rating of E or be faced with the prospect of heavy fines and an inability to continue to let the property.
There is ample funding available to cover the cost of improvements which will increase property value and enhance tenant comfort and well-being.
Landlords in Brighton and Hove who have any concerns should contact BHESCo for the following advice and support:
- An up-to-date accurate EPC
- Identifying the most cost-effective improvements to increase an EPC
- Project management of efficiency improvements
- Financing efficiency improvements through BHESCo’s Pay As you Save initiative