In a move that caught the whole rental industry off-guard, on Wednesday 20th September Rishi Sunak appeared to cancel the planned changes to MEES legislation – Minimum Energy Efficiency Standards.
We had been expecting that all rental properties would need to be a minimum C on the EPC by 2025 (or 2028, the Government hasn’t been clear) but on Wednesday Mr Sunak said the planned changes would be scrapped. So far, there has been no official notice or confirmation from the Department of Housing, Communities and Local Government.
In hindsight, this is not a surprise. The Government consulted on the EPC changes in 2021 and has not yet released the consultation results. This has left landlords, agents and the rental industry mystified about how 2.65 million homes (~60% of rental properties are rated D and E) would be upgraded in time and how landlords would pay for it.
In the absence of any grants or incentives, there was clearly no substantive plan to bring the C rating into force. Alongside no plan, there has been no information beyond the odd leak to the media.
Three factors may have changed the game
First, landlords are voters too and the Conservatives face an uphill battle at the next election. Second, the rental market is seriously short of stock and rents are increasing. Doing anything to reduce supply is not ideal. Third, there is debate raging about revamping the EPC. Currently it rewards gas over electricity and is a measure of theoretical cost and not carbon footprint nor energy efficiency. If the EPC algorithm is updated it could punish gas boilers and hence make the C rating target even harder to attain for many houses.
What about the need to improve the energy efficiency of poorly-insulated and cold homes? There is still a real need to improve the warmth, efficiency and performance of these homes but now there is almost no carrot, no stick, no policy and no plan.
Boiler Upgrade Scheme
The one incentive in place which might help is the Boiler Upgrade Scheme whereby you can receive up to £7500 for replacing your boiler with a more climate-friendly option. The limit was £5000 before yesterday’s announcement. There was a total of £450 million available and it is not clear if this has changed. For context, £450m would be 60,000 boilers at £7500 each. There are ~19 million homes which need to improve their energy efficiency.
What can you do?
If you are a landlord who wants to reduce the carbon footprint of your property, we can help. The Haslams Group is motivated to help clients lighten their impact on the planet and we can organise and manage retrofits, upgrades and refurbishments. Talk to your dedicated Property Manager for further information.