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November Lettings Regulation Update

November 2020

The government has legislated to bring all greenhouse gas (GHG) emissions to zero by 2050 and a number of policy proposals have been discussed on how this can be achieved. 

One proposal in particular focuses on the aim to improve rented homes in England and Wales to Energy Performance Certificate (EPC) Band C by 2030.  

Private Rented Sector

Whilst GHG emissions from homes have reduced by 16% since 1990, they still account for 15% of all emissions. This increases to around 22% once electricity consumption is included. 

The consultation document states that Private Rented Sector (PRS) properties are amongst the least energy efficient, costing over £6bn in energy bills in 2018. This equated to GHG emissions of around 11 megatonnes of carbon dioxide equivalent per annum.     

Views on these proposals are invited by way of a consultation. The consultation closes on 30th December 2020 and can be found here.

Minimum EPC Requirement

Under existing regulations rented property in England and Wales is required to meet a minimum EPC Band E, unless an exemption is registered.  

Government proposals outlined in the consultation include:

  • All new tenancies from 1st April 2025 are required to meet a minimum Band C.
  • All existing tenancies to meet a minimum Band C by 1st April.
  • An EPC should be in place throughout the tenancy. Under existing regulations, renewal of an EPC is only required once certain trigger points are reached.
  • An increase in the maximum fine to £30,000 per property for each breach of the regulations.
  • Agents and property portals to only advertise and let properties compliant with the regulations.
  • Provision for landlord exemptions on the grounds of affordability.
  • An increase in the investment “cost cap” beyond which improvements are not required from £4,700 to £10,000 Inc. VAT.

Full details of the government’s proposals are contained within the consultation document.

On the same day as this announcement, applications opened for the Green Homes Grant Scheme. Under the scheme landlords and homeowners in England can apply for a grant of up to £10,000 towards the cost of improving their property.             

Once approved the grant is provided by way of a voucher to fund at least two-thirds of the cost of engaging a contractor(s) to undertake the improvements. The maximum contribution is £5,000 or up to £10,000 for lower-income households.

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