Are you an energy-efficient landlord?

More than 400,000 properties in England and Wales could be un-lettable because they fail to meet new energy performance standards. Landlords must act now.From 1st April 2018 it will be offence to either undertake a new letting or renew an existing tenancy for any residential rental property that does not reach a minimum Energy Performance Certificate rating of Band E (SAP Rating of 39).From April 2020 the reins are tightened further to a minimum Band D (SAP Rating of 55) from which date the legislation will apply to all tenancies regardless of whether the tenancy is being renewed.Any landlord with properties with EPC ratings below E (F or G) must act now to improve them and those with an E rating must plan for 2020.There are some potential exemptions including whether the property is a listed building and the landlord can demonstrate that he has carried out energy efficient work to the extent they are permitted under the planning regulations. There is also an economic argument relating to works undertaken in accordance with the recommendations that form part of the EPC. Potential exempt properties will have to be registered on-line in the Private Rented Sector Exemptions Register (PRS) Older properties including stone and brick terraces, cottages and Victorian and Edwardian homes are likely to need the most work to bring them up to standard, as these properties are likely to have solid walls, and many will lack double glazing, underfloor and loft insulation.It should be appreciated by all landlords that where improvements are carried out and the EPC rating is improved tenants will save on energy bills. As a result, landlords will have a more marketable rental property and the expectation of an enhanced rent.Green Deal FinanceTo fund energy efficiency improvements it should be noted that the Green Deal is back. The original scheme was launched in 2012 but the government ceased funding in 2015. The Green Deal Finance Company was sold to private investors in January 2017 and recommenced financing loans to consumers in May 2017 through a countrywide network of installers.The person benefiting from the improved property will make the repayments, which in theory should not be higher than the amount saved as a result of the enhanced efficiency. These repayments are paid by the utility bill payer and therefore in most cases this will be the tenant and not the landlord. Tenants will need to be notified in advance where they are due to pay an increased charge, which may have an effect on the rent for the property.It is also worth taking a look under the ‘search for grants and offers’ section on the Energy Saving Trust website, which will reveal more about offers available.Five Steps to Improve Energy Efficiency:1    Loft InsulationThis is one of the easiest, cheapest and most effective measures to start with. The recommended depth of blanket style insulation (glass or mineral wool) for a loft is 250 to 270 mm. If you already have insulation, but it was put in some time ago, it is worth checking the depth, as only a few years ago the recommended depth of insulation was increased from 100mm to 200mm.2    Wall InsulationUninsulated walls account for up to 33% of the heat lost in a home. Filling cavity walls can save a significant amount of energy for the average home and reduce carbon emissions. Cavity wall insulation costs will vary depending on the property but are a worthwhile investment.If the property has solid walls, these may need to be insulated either internally, externally or both. There are several methods of doing this, some more expensive than others but usually involve drylining and cladding.3    Double GlazingIf there is no double or secondary glazing fitted, this will make a big difference to energy efficiency but it is a relatively expensive job. However, the cost has to be viewed in terms of return on investment. The initial investment may be fairly high (say £600 to £750 per window) but double-glazed windows will allow more heat to be contained inside a home.Double glazing is available in a variety of styles, so it doesn’t have to ruin the look of a home. When you are choosing the windows, look out for the ‘Energy Saving Trust recommended’ logo as this seal of approval is only given to the more efficient windows.   4    Boiler UpgradeInefficient boilers could be adding considerably to a tenant’s energy bills? That means that upgrading could be a great way to dramatically reduce a home’s carbon emissions and improve the EPC rating as boilers account for 60% of the carbon dioxide emissions in a gas heated home. Boilers are rated on a scale of A to G, with A being the most energy efficient. If the existing is old and at the lower end of the scale then investing in a new one could have dramatically beneficial effects.   5    Cut out DraughtsClose fitting doors and windows will cut down on draughts and cooling airflows, which will dramatically reduce energy loss and the cost of heating for tenants.6     Solar PanelsSome landlords will consider fitting solar panels to the roof if there is a suitable south-facing aspect. However, these are likely to be expensive investments initially, with a payback of a number of years (likely to be in excess of 10 years).With all these measures to improve the EPC rating of properties, if contractors are selected to do the work, take care to choose those who come with a recommendation. Obtain recommendations, inspect previous work, consult with satisfied customers and draw up specification contracts before commissioning any work.*The minimum energy efficiency standard (MEES) was introduced in March 2015 by the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015. The MEES Regulations originate from the Energy Act 2011 which contained the previous coalition government’s package of energy efficiency policies including the Green Deal.For further information and discussion please contact either Jane or Chris at Hazells on 01284-702626.Source: based on an article published by Landlordzone July 2017