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Minimum Energy Efficiency
Standards
The Reasons, Regulations, Improvements, and What it all Means for You

The Reasons

In 2014 the government reported that around 40% of the UK’s carbon emissions come from the built environment, largely through heating, cooling, lighting and providing hot water for buildings. Following this, in 2019, the UK became the first to set a net zero greenhouse gas emissions goal to be achieved by 2050 - this superseded the previous target of reducing emissions by 80% in comparison to levels measured in 1990.

The ambitiousness of this target requires that all sectors work to lower their own emissions to help the UK achieve their goal. Only approximately 15% of the current building stock in the UK was built after 1990, which is when standards for insulation and energy efficiency were brought in, and therefore the majority of homes will require improvement work to bring them to the standard needed to achieve net zero emissions.

As part of their action plan to guide the UK toward the 2050 target and address fuel poverty* the government has an aim to upgrade all homes to EPC rating grade C by 2035 which, in theory, would significantly decrease both carbon emissions and cost of heating the home. Currently, the average EPC rating for domestic properties is a D rating although the minimum requirement for rental properties is an E rating. According to a Department for Business, Energy & Industrial Strategy report the annual running cost of a C rated home is £650 less than an average E rated home.

*Fuel poverty is defined as a property that has heating costs above the national median when meeting these costs places the household below the poverty line.

The Regulations

As well as the introduction of Energy Performance Certificates (EPCs) to help measure and track the energy efficiency of buildings the government has also brought in Minimum Energy Efficiency Standards (MEES) to ensure that tenants in the private rented sector have a standardised level of efficiency in the buildings that they live or work in.

MEES legislation was first brought into effect in April 2018 and applied to both domestic and commercial rental properties when granting fresh tenancies. This was however updated for domestic properties in April 2020 to cover all existing tenancies, meaning that all rental properties must comply, regardless of when the tenancy was started and the same will apply for commercial properties from 2023.

MEES regulations require landlords to have a valid EPC with a minimum of an E rating before they can legally let a domestic property or, for commercial properties, grant a fresh tenancy or update/extend an existing. The penalty for domestic landlords non-compliance with MEES legislation is a fine of approximately £5000, for commercial landlords it is afine of up to £150,000.

Exemptions

There are several categories of property that are exempt from MEES legislation , so if your property falls into these then you can apply to have it added to the MEES Exemptions Register:

  • ‘High cost’ Exemption may apply in cases where the cheapest of the improvements recommended for the property would cost over £3500 to implement, as evidenced by official quotes from 3 seperate installers. This exemption only applies to domestic property.
  • ‘7 Year Payback’ Exemption may apply where it can be demonstrated that the cost of energy efficiency measures required to bring the property up to standard will not pay for themselves through savings made on your energy bills within a 7 year timeframe. This exemption only applies to non-domestic property.
  • ‘All Improvements Made’ Exemption may apply where it can be demonstrated that all relevant energy efficiency improvements that can be made to the property have been carried out, but the property still has an EPC rating of below an E. This exemption applies to domestic and non-domestic property.
  • ‘Wall Insulation’ Exemption may apply where wall insulation is required to bring the property up to standard, but for technical reasons cavity, internal or external insulation systems are not suitable for the specific property in question. This exemption applies to domestic and non-domestic property.
  • ‘Consent’ Exemption may apply where third party consent would be required to install recommended measures, such as in the case of planning permission being needed for the installation of solar panels, but consent has been refused. This exemption applies to domestic and non-domestic property.
  • ‘Devaluation’ Exemption may apply where it can be demonstrated (through an independent valuation by a RICS surveyor) that installation of recommended energy efficiency measures will devalue the property by over 5%. This exemption applies to domestic and non-domestic property.
  • ‘New Landlord’ Exemption may apply in specific circumstances where a person has become a landlord suddenly, such as when a new lease has been deemed created by operation of law, or a lease has been granted due to a contractual obligation. If applied for successfully this category of exemption is valid for a period of 6 months.

All categories of exemption except the ‘New Landlord’ Exemption are valid for a period of 5 years. After this period the landlord must endeavour to improve the property’s EPC rating to meet the minimum standards. If this cannot be achieved then a further exemption may be able to be applied for.

The Improvements

If your property is F or G rating and you are currently letting it out, or if you wish to do so in the future, then you have the option of using the recommendations provided with the EPC to attempt to reach the rating you need.

It’s important to note that these recommendations are generated automatically by the EPC software and may not be the most cost effective, labour efficient, or suitable for you and your properties needs. It’s advisable to get improvement advice that is tailored to your property and needs, this is where Easy EPC’s MEES Consultancy comes in - we use the data collected during an EPC survey to create multiple scenarios using the EPC software to find the most cost effective, least labour intensive and most suitable options for your needs. The scenarios are set out in an easy to understand report and each scenario represents a different route that you can take to reach the rating you require. Once you have reviewed the report we are more than happy to talk you through the scenarios in detail and, if you wish, carry out further analysis combining recommendations from the previously provided options. If this is something you would like to consider then you can get in touch with our friendly admin team who will be more than happy to answer any questions you may have - you can contact us here or by calling 0800 170 1201 (Office hours are Mon - Fri 9:00 - 17:30 excluding Bank Holidays).

What it means for you

Domestic Landlord As a domestic landlord you have a legal responsibility to have a valid EPC with at least an E rating for every property that you let out, regardless of when the tenancy began, failure to do so can result in a fine of £5000. Please note that this fine is per offence, so if you let more than one property that is F or G rated then you will be fined multiple times.

If your property(s) are F or G rated but you wish to let them out then you have the option to use the generic recommendations provided on the EPC, however it is advisable to seek advice tailored to you and your property’s needs prior to using time and money on recommendations that aren’t guaranteed to raise your property’s rating to the desired grade.

Need advice on raising your EPC rating? Chat to us today.

Commercial Landlord As a commercial landlord you have a legal obligation to have a valid EPC with an E rating or above for any properties that you grant a fresh tenancy for, extend, or update - this will be extended to cover all tenancies in 2023. Failure to comply with MEES regulations by renting a property with an F or G rating can result in fines of up to £150,000.

If your property(s) are F or G rated but are currently letting them out, or you wish to do so in the future then you have the option to use the generic recommendations provided on the EPC,however it is advisable to seek advice tailored to you and your property’s needs prior to using time and money on recommendations that aren’t guaranteed to raise your property’s rating to the desired grade.

Need advice on raising your EPC rating? Chat to us today.

Property Sellers While there is currently no minimum rating requirement for properties that are for sale, since the introduction of MEES legislation many banks and financial institutions have refused to carry out sale transactions or provide finance for F or G rated properties.

Need advice on raising your EPC rating? Chat to us today.

For more landlord resources and information click here.

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