Despite initiatives available to help with costs and evidence to suggest energy efficiency homes are worth more than their poorly performing counterparts, landlords are not keen on making eco improvements.
Past analysis by GreenBuildingRenewables.co.uk found 63% of landlords questioned would rather sell their buy-to-let than purchase and install features including insulation, solar panels or heat pumps.
Now an article published by PropertyReporter highlighted how landlords will be under increasing pressure to retrofit their buy-to-lets with energy-saving features in the near future.
Current energy performance requirements
At present, it is illegal for landlords to privately rent out a property where the EPC is F or G. The EPC must also be valid, with each certificate having a 10-year life span.
Changes in the future
The Government’s reform of the entire property market will continue in 2026 when it plans to revise how home energy performance is measured. A new EPC system, featuring new assessment metrics, will be introduced in the latter part of next year. The current Standard Assessment Procedure (SAP) will be replaced by the UK Home Energy Model (HEM) in a bid to make assessments more accurate.
A new ratings system is to be expected and properties that currently have a C rating may drop down the rankings when next assessed – something to note if your buy-to-let’s current EPC is close to expiration.
It is also likely the Government will impose a new law by 2030, which will require all privately rented properties to have an EPC of at least a C – a grade that will most likely be harder to achieve. This revised standard may apply to newly created tenancies even sooner, perhaps as early as 2028.
Tenant requests: less room for refusal
ECO4 (Energy Company Obligation) is a Government-backed scheme that requires big energy companies to make funds available to the general public for eco-efficiency improvements. The funds are available to some private tenants, who can obtain grants to pay for features such as new boilers and solar panels. Although a tenant’s application for funds may be successful, they will still need written permission from the landlord to make eco changes.
There are currently a number of grounds on which a landlord can refuse a tenant’s request, although a tenant can challenge a landlord’s ECO4 refusal by applying to a First-Tier Tribunal. These grounds may, however, be eroded in the near future.
The introduction of a new Decent Homes Standard and Awaab’s Law in the private rented sector is imminent (an aspect of the Renters’ Rights Bill). These laws will see better thermal comfort for tenants almost certainly become a priority.
While the benefit of the ECO4 scheme is an energy supplier covering the cost of the improvements, the fund does not cover the cost of rehousing a tenant should the work be of a severely disruptive nature. Not does it cover any remedial work required, such as making good. Those cost need covering by the landlord.
Energy efficiency in rented properties is currently flying under the radar but it shouldn’t be ignored by landlords who are planning for the future. If you are one of the 63% of landlords who would rather sell their property investment instead of make eco changes, contact LandlordBuyer today.