01 Oct 2020

The government has launched an official consultation on proposals to make the private rental sector more energy-efficient – and they include hefty fines for landlords who fail to invest to reach the new targets.

A document released by the Department of Business, Energy and Industrial Strategy says the move to make the PRS greener is part of a government masterplan to de-carbonise buildings to mitigate the effects of climate change. 

The proposals would see the PRS subject to ever-stricter energy targets in the next decade in order to:

  • decrease bills for low income and vulnerable tenants, in support of the government’s statutory fuel poverty target;
  • increase the quality, value and desirability of landlords’ assets;
  • reduce energy bills for tenants and ensure warmer homes;
  • support investment in the domestic retrofit supply chain across England and Wales;
  • provide greater energy security through lower energy demand on the grid and reduced fuel imports.

Although there are some options in the 48-page document, the government makes clear that its “preferred policy scenario for improving the energy performance of privately rented homes” consists of four elements:

  • raising the energy performance standard to Energy Performance Certificate energy efficiency rating Band C;
  • achieving the improvements for new tenancies from 2025 and all tenancies from 2028;
  • increasing the maximum investment amount, resulting in an average per-property spend of £4,700 under a £10,000 cap;
  • introducing what government calls a ‘fabric first’ approach to energy performance improvements (this is improving the performance of the materials that make up the building fabric itself, before considering the use of mechanical systems).

This all looks likely to involve substantial investment by landlords in addition to any grants or subsidies, and measures to enforce the new regulations may ultimately involve agents and portals being ordered only to advertise those rental properties that conform with the energy efficiency targets.

The small print of the consultation document says it will give powers to tenants to request energy improvements, and allow local authorities to fine non-compliant landlords up to £30,000.

You can see the consultation document here, with details of how to respond

The closing deadline for comments from landlords is 11.45pm on December 30, while the government says it will respond next spring. First work to be undertaken by landlords is likely to be in 2023 if the consultation’s timetable proves reliable.

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