As we have seen, the buy to let market has undergone further changes in 2017 with both changes to taxation of BTL investments and new portfolio landlord rules. No sooner has the dust settled on these changes before we see yet more regulation coming in 2018.
On 1st April 2018 (no it isn’t an April fool’s joke), the Minimum Energy Efficiency Standard (MEES) makes it unlawful to let out a residential property with an energy performance certificate rating of F or G (unless exemptions apply)? From this date landlords cannot renew or grant tenancies on a property if it does not meet the MEES regulations. Beyond April 2023, the continued private rental of all buildings failing to meet the minimum standard will be outlawed entirely.
The potential risk to landlords (if the property fails to meet MEES) is financial losses and the need to borrow more money to make necessary improvements.
If you have BTL investments it may be worthwhile checking the EPC (Energy Performance Certificate) rating to ensure that your property complies with the new rules. You can view individual EPCs by just entering the property’s postcode here (England & Wales).
I have listed below some useful information regarding the changes:
- EPCs have a validity of 10 years. They were introduced in 2007.
- Landlords must register exempted properties along with the necessary evidence to the Private Rented Sector Exemption Register if they wish to continue to let the property. A breach of the regulations could result in a substantial fine.
- An exemption may apply if it’s proven that improvements may decrease the property’s value by 5% of more, or where upgrades may damage the property, or where all improvements have been made, but the property still fails to meet the minimum standard.
- New landlords can apply for a temporary exemption for six months from the date of taking ownership of the property.
- Full details of the Energy Efficiency (Private Rented Property – England & Wales) Regulations are available here.