Buy-to-let landlords can no longer claim a funding exemption from making their properties more energy efficient - meaning they could be on the hook for improvement costs of up to £3,500 and fines of up to £5,000 if they fail to make necessary changes.
In April 2018, rules came in requiring privately rented properties to have a minimum energy performance certificate (EPC) rating of E, but some landlords were exempt from having to improve their properties.
As of 1 April this year, landlords who cannot secure government funding to help bring their properties up to an E rating can no longer claim this exemption, and will have to pay for work to be done themselves.
Here, we explain what the regulations mean, outline energy efficiency improvements you can make, and reveal further rule changes coming in the next few years.
Landlords who fail to comply could face fines of up to £5,000.
Until this month, landlords were able to register for the 'no cost to the landlord' exemption, which meant that they didn't have to make improvements if it would leave them out of pocket. However, this exemption was lifted on 1 April.
Landlords with properties rated F or G for energy efficiency will now have to cover the cost of improvements up to a cap of £3,500 if they can't find alternative funding.
Exemptions are still in place for properties that will cost more than £3,500 to bring up to standard, but landlords may still have to pay for improvements up to that cap.
While £3,500 is not an insignificant sum, it's worth noting that only a few buy-to-let owners will face costs this high; it costs an average of £1,200 to upgrade older properties to an EPC grade E.
The average EPC rating for a UK home is D - so landlords aren't being asked to make properties any more energy efficient than the average home.
The EPC register is also a good way to check how energy efficient a property is if you're thinking of buying it - and therefore, whether you're likely to incur extra costs to improve its EPC rating.
If your property has been given an EPC rating of F or G, there will be a list of ways to improve the property, along with general costs of what you'll need to spend on the work.
Common recommendations include:
For help funding home improvements for energy efficiency, you may be able to get a loan from the Green Deal Finance Company - an alternative to the original government-backed Green Deal scheme, which closed in 2015. Our guide on explains how this works.
Landlords with existing tenancies will have avoided having to make any energy efficiency changes so far, but that will change from next year.
From 1 April 2020, MEES will apply to all tenancies, regardless of when the lease was granted.
This means that all landlords will need to make sure their properties adhere to the guidelines - and, if this applies to your buy-to-let, it would be wise to start making a plan now to make sure you're ready for that deadline.
From 1 April 2023, the rules will be rolled out to tenanted commercial buildings.
There are a few properties that don't need an EPC, including: