Labour affirms commitment to increasing minimum energy performance targets for tenanted properties

Following its win in the election, Labour has confirmed its intention to push forward the Net Zero agenda. As part of this, it is expected that the Labour Government will revisit the previous government’s plans to increase the minimum EPC rating for both commercial and residential property from E to C, which was scrapped towards the end of the Conservatives’ tenure.

Currently, landlords must ensure that any properties they let – save for those which are exempt from the EPC regulations - have an energy efficiency performance of E or higher before they grant new tenancies. Failure to provide a valid EPC which meets the minimum energy efficiency standards of the day can leave landlords facing large fines.

Recently Ed Miliband, the newly appointed Secretary of State for Energy and Security, told the House of Commons: “One thing that this Government will do that the last Government did not is demand that landlords raise the standard of their accommodation to a proper energy performance certificate standard C by 2030.”

How should landlords and property investors prepare for the new minimum EPC rating?

Ed Miliband’s statement is a clear indication of which way the wind is blowing. Although there are no set dates to increase the minimum energy rating yet, the expectation is that the Government will look to increase the minimum energy rating of newly tenanted properties to at least C within the decade, with the potential for further staggered increases in the years that follow.

If you own property that is rated D or lower, you may wish to make improvements to its energy performance sooner rather than later. This will protect you from any legislative changes in the future and make the property more attractive to tenants.

When investing in new property which has an energy rating of D or below, you should budget for the additional cost of bringing the property up to a C rating within the next few years, and you could consider renegotiating the purchase price with this in mind.

It is possible that the Government could offer some form of support to assist landlords in improving their properties’ energy efficiency ratings, so those concerned about financing such improvements may prefer to watch and wait.

How can we help you?

If you’re planning to purchase a property, we will check the EPC rating and flag any risks or improvements that may be needed and can suggest pragmatic solutions.

There are many unknowns at this stage, but we will release further updates as announcements are made. In the meantime, our real estate experts are here to answer any queries you may have and advise you as best we can.

Contact real estate solicitor Ryan Cotton on 01274 848 837 or at ku.oc1728465407.fcl@1728465407notto1728465407cr1728465407

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