The government’s backtracking over the introduction of energy performance targets for property let out in England and Wales is facing criticism, but it will be welcome news for landlords with older properties deemed too expensive or difficult to upgrade.
Let property must currently have an energy performance certificate (EPC) rated E or above. Without this, the property cannot be legally let regardless of whether the tenancy is an existing one, a renewal or a new let. The government intended to raise the EPC requirement to C or above by 2028.
The penalty for not having a valid EPC is £5,000. Under the now scrapped proposals, the penalty was going to be £30,000.
The cost
The cost of moving from a D or E rating to a C would typically be in the region of £10,000 to £20,000. There were reports that the government would have covered anything over £10,000, but that would still leave a significant burden for many landlords. As capital expenditure, most upgrades would not even have qualified for tax relief against rental income.
- Raising energy efficiency to the required standard might have required improving insulation, installing double glazing or replacing old gas boilers.
- However, it would have been very difficult, if not impossible, to bring some older properties up to an EPC C rating.
One concern considered by the government was that costs would have been passed on to tenants by way of higher rents.
A useful guide to energy performance certificates can be found here.
How can we help?
Give us a call on 01444 716946 or email us here to discover how, as a business, you can strategically plan your budget to implement essential energy-efficient alterations, ensuring a better return on your investment and contributing to a more sustainable future.
