Domestic private rented sector minimum level of energy efficiency

In December 2017, the Government issued a consultation on the domestic minimum energy requirement (MEES), see https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/669198/PRS_Minimum_Standards_Consultation_2017.pdf

The main proposal is that the rule that improvements should not be conditional on full funding but that landlords should be required to make a financial contribution. The figure suggested is £2,500, this would be inclusive of VAT and inclusive of any part funding available but no spending made previous to Oct 2017 would count (unless of course that spending had already lifted the property into band E or higher).

The £2,500 spend would still be required even if it did not bring the property to an E, but crucially if there were no recommendations that would get the property to an E for less than £2,500 then nothing would have to be done. For example, if £1,000 could be spent on loft insulation but that still leaves the property at an F but there were no other measures costing less than £1,500 then the landlord would only have to spend the £1,000.

Crucially by the Government’s own admission the £2,500 cap would not encourage any new central heating systems, solid wall insulation or double-glazing installs and raising the limit to £5,000 (as originally proposed a year ago) would nearly double the number of homes affected (from 139,000 to 260,000) and the average landlord costs/property would still only be £1,700.

The consultation document explains the benefits of the cap, “Energy efficiency improvements can benefit landlords too in the form of reduced long-term property maintenance costs, increased rentability, increased tenant satisfaction, reduced void periods, and ultimately in increased sale value of the property. A number of studies have shown a robust link between higher standards of energy efficiency and increased property values. The Government believes that the likely benefits of an improved property will outweigh any costs resulting from the regulatory amendments proposed through this consultation. Energy efficiency also brings wider benefits to society as a whole. The cleanest, cheapest and most reliable energy is the energy which we do not use, and successful implementation of the minimum standard regulations will reduce system pressures, helping make supplies more secure and reducing carbon emissions, which is essential to meeting the UK’s climate change targets.”

GDAM welcomes the proposal but considers that a £5,000 cap would be much more effective without unduly affecting landlords.