28th January 2020
Is your property ready for energy efficiency legislation?
Except in a few special circumstances, it will soon be a requirement for all rental properties to have an EPC rating of E or higher to meet minimum energy efficiency standards (MEES).
While this is important information for landlords, Jason Lee, National Sales Director at SDL Auctions, explains why it’s important for house sellers to take note, too.
There are numerous benefits to creating an energy-efficient property. As well as the obvious environmental benefits, the householder will enjoy a property that’s cheaper to run and warmer, too. This is a big consideration for tenants living on a budget, so an energy-efficient home can prove easier to let.
As you probably know, an Energy Performance Certificate (EPC) is required when renting or selling a property, so that potential tenants and buyers have an idea of how much it will cost to run.
From 1 April this year, it will become law for all rental properties to have a minimum energy performance rating of E on an EPC. In most cases, failure to comply with this legislation could result in a civil penalty of up to £4,000.
These regulations have been phased in gradually over the past couple of years so should come as no surprise to landlords – but it is important to know about them if you are planning to sell a property, too, particularly if it is likely to appeal to buy-to-let investors.
If you are selling with a sitting tenant, or indeed any property which would make a good rental home, you should be aware that savvy investors will be looking for those which already meet energy efficiency requirements, as they will only have until 1 April to comply.
Having an EPC rating of E or higher will give your property the edge over its competitors and mean the new owner can start letting the property right away, instead of having a costly void period while they carry out the necessary improvements.
Are you thinking of selling your property? Why not request a free, no obligation auction valuation by clicking here or calling 0800 304 7879.
You can find out what needs to be done to your property by looking at its current EPC, which displays the property’s existing rating along with its potential rating in the column next to it. This shows you what the new rating could be if all the recommended improvements are carried out. These are detailed later in the report, with projected costs, and can be as simple as switching to low-energy light bulbs or improving the loft insulation or more costly recommendations such as replacing the gas boiler.
The government has said landlords should not have to spend more than £3,500, including VAT, on bringing their properties up to standard. If your property still cannot be brought up to an E rating after you have spent this amount, you may apply for an exemption.
Other exemptions include:
- If there are no improvements which can be made which would improve the EPC rating or if even the cheapest recommendation would cost more than £3,500;
- If the property is empty and you have no plans to let it;
- If the only recommendations are cavity, external or internal wall insulation and this would damage the fabric or structure of the property or building;
- If recommended improvements would devalue the property by more than 5%;
- If you require but cannot obtain consent from a third party such as a tenant, freeholder or mortgagee. If tenant consent is the problem, this exemption only lasts until the tenancy ends or changes.
- In these cases, you may let the property once the exemption has been registered on the PRS Exemptions Register. However, note that the exemption lasts for a maximum of five years and you must make every effort to comply before registering a further exemption.
As you can see, it makes sense to get your property ready for the regulations now. But if you want someone else to take the strain, why not sell your property at one of our February auctions, or online?
Call us on 0800 304 7879 or click here to find out more about selling your property at auction.