Many landlords will have hoped that they would have seen the last of the big regulatory changes in their industry, but this isn’t the case. As of the 1st of April2018, there will be another change relating to regulations for private lets. This new regulation requires the property to hold a minimum of an E rating in its Energy Performance Certificate (EPC) if a new let or a renewed let takes place. This is going to impact on many landlords but this is not the end of the changes.
As of the 1st of April 2020, all privately let properties will need to hold a minimum of an E rating on its EPC or it will not be a suitable property for lettings. Even if a landlord doesn’t believe they will be impacted by the change coming in as of April 2018, before too long the entire market will have to comply with this ruling, so it may be of benefit to make changes sooner rather than later.
Making improvements can be a smart idea
There are suggestions, or rumours, that in time, the minimum requirement will be moved to a D or a C, so this is something that landlords should consider. This isn’t the case just yet but it may be and it may be sensible to start upgrading a property while it is cost effective to do so.
There is a penalty of up to £4,000 for landlords when they don’t comply with this regulation. There are some exemptions in place though, and these may be of interest to some landlords. Exemptions can be obtained on the following grounds:
· That a landlord has undertaken all of the possible improvements they can but the property’s EPC rating is still less than an E
· Where a landlord has had to obtain permission from a third party to undertake the necessary work and this permission has been denied
· If a landlord would be out of pocket in making these changes
· In that carrying out the work would reduce the value of property by a minimum of 5%, with this valuation being provided by an qualified independent surveyor
If an exemption is obtained, it will last for a period of five years.
There are many benefits from improving the EPC rating of a property
It is important that tenants and landlords understand the benefits of complying with this regulatory change. Studies have shown that the savings of heating an E rated property compared to a G rated property are more than £1,000. This is a positive outcome for the tenant and of course, anything which makes the tenant happier can be positive for the landlord. However, the landlord can take confidence and happiness from knowing that they have made genuine improvements to their home which will hopefully improve its condition and value.
A landlord is likely to feel as though they are facing one rule change after another these days, and it can become difficult to stay in touch with all of the updates. This is why it makes sense to call on experts for assistance. Any landlord that wants to discuss what they should be doing or is looking for guidance will find that Geoffrey Matthews is always happy to help. Get in touch if you would like to arrange an appointment.