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Landlords must prepare for new energy efficiency law

Are you ready?

April 2016 marks an important period for property owners as it will see the introduction of a piece of legislation giving tenants new rights in demanding their homes are energy efficient.

The first piece of legislation under the Energy Act 2011 will give tenants the right to ask their landlord to make their property easier and cheaper to keep warm if it does not meet energy efficiency standards. If a landlord fails to comply they could be given a penalty notice.

These standards, recorded on an Energy Performance Certificate (EPC), combine a measure of the rate of energy loss (such as heat loss through walls and roof) with a measure of how efficient a property’s systems are at creating that energy. Homes are ranked from the most energy efficient in band-A to the least in band-G.

A second piece of legislation, due to come into force from April 2018, will require landlords to ensure their property has an EPC rating of band E- or higher.

Implications for residential and commercial landlords

Paul Shattock, property and estates expert at NFU Mutual, said: “The Energy Act 2011 has significant implications for landlords of both residential and commercial property. Once the legislation is in place from April 2018 it will make it unlawful to let properties with an EPC rating of F or G.

“If a property is not upgraded to minimum standards then it can’t be marketed which would have an impact on its value. This is why it is important landlords gain a full understanding of the energy efficiency ratings of all properties within their portfolio. This will then allow them to calculate the work and costs required to bring properties up to standard ahead of the new legislation.”

Green Deal funding for improvements axed

A Government-backed fund which provided money for homeowners carrying out energy efficiency measures has been ended after low take-up and allegations of poor workmanship.

The £540 million scheme allowed people to install new green technology into a property with no up front costs allowing the amount to be paid back through energy bills over a period of time.

It was decided the last release of the Green Deal Home Improvement Fund would end on 30 September 2015, or until the fund ran out.

While still available, the final amount can provide homeowners up to £1,250 towards the cost of installing any two from a list of approved measures.

Following the announcement by the Government, Richard Lambert, Chief Executive Officer, National Landlords Association, said: “The Green Deal was a good idea in theory, but that was never matched in practice.

“Whatever our immediate frustrations over this decision, the Government now has an opportunity to construct a more certain and sustainable means of supporting landlords to improve the energy efficiency of their properties. But it will have to move quickly, as the deadline of the introduction of minimum efficiently standards remains unchanged.”

Useful links

Find an accredited person to undertake an Energy Performance Certificate or check that an individual is accredited.

For tips on energy saving improvements visit the Energy Saving Trust’s website.