Following the introduction of the legislation, which came into effect on 1st April 2018, Adam Kingswood, owner of Kingswood Residential Investment Management, is pleased that 99% of the firm’s landlord clients took action over the last twelve months to ensure that their rental properties met the new required standards.
Now, Adam is calling on all landlords to do the same in order to ensure that their properties meet the required standards for their tenants, avoid periods where their properties are empty whilst they perform the necessary improvement work to meet the regulations and help ensure that there is enough quality rental housing stock on the market.
Adam comments: “Many landlords in Nottingham will have taken action to ensure their properties meet the new required standards. However, there are some who have not and this needs to be addressed. A property cannot be re-let until it meets the new MEES standards which means that if a tenant moves out, landlords will have a costly period of no rental income and the cost of bringing the property up to standard. I encourage all landlords to take action now to ensure their tenants have an energy efficient property and that they are compliant with the new law.” £0
Were Landlords MEES Ready?
Figures presented by David Cox, Chief Executive of ARLA Propertymark show a mixed picture nationally, with the number of properties which are EPC rated F or G having fallen dramatically from 700,000 in 2012, to 300,000 today. However, according to ARLA, this still means many landlords are yet to prepare their properties for the new laws.
Locally, Adam Kingswood is pleased that his landlords have taken heed of advice to prepare for the introduction of MEES with result that of Kingswood’s 250 managed properties, just 2 properties will need improvements making before any new letting or tenancy extension. In both cases, £31500- £32000 expenditure will be needed for upgraded heating and insulation in order for a new EPC to meet the minimum E rating. £0As it stands, landlords are only required to carry out improvements where they can be done at o cost – i.e where funding schemes are available to cover the full cost of purchasing and installing the improvements.
Introduced with the aim of improving the energy efficiency of private rented properties, MEES requires all buildings, both domestic and non-domestic, in England or Wales to achieve at least an ‘E’ rating on their Energy Performance Certificate (EPC) before they can be leased or rented.
The regulations came into force for new lets and renewals of tenancies with effect from 1st April 2018 and for all existing tenancies from 1st April 2020. It will be unlawful to rent a property which breaches the requirement for a minimum E rating, unless there is an applicable exemption.
The Consequences of Non-Compliance
Landlords who failed to meet the deadline will either face fines of up to £34,000, or lose money on empty properties which cannot be let until they meet the required standards. For the lettings industry overall, the consequence of this is that there could be a resultant blockage of rental properties coming to the market and, given the existing shortage of stock, renters could be face with increased competition when trying to find a home.
Take Action Now
Adam continues: “For landlords who have not yet taken stock of the implications of MEES for their property portfolio this is an urgent priority. £0 Factors such as the future marketability of properties falling below the threshold and the impact on re-letting, not to mention legal consequences, will need to be balanced against the costs of the required improvements. Landlords should undertake a thorough review of the energy efficiency of their properties, assess their position and action plan accordingly.”
Putting into place an action plan to lift the EPC rating of at risk properties by making strategic and well-targeted improvements, may help landlords to reduce the cost implications of achieving compliance. Adam advises that the first step is to verify the accuracy of any existing EPC report. EPCs may well have been rated incorrectly due to flawed assumptions made by the software or improvement works that will improve the EPC rating may have been carried out without the certificate being renewed.
Adam adds: “The MEES legislation is now with us which means that having a well formulated energy action plan in place and working through it is essential. It will ensure compliance and help to give landlords peace of mind knowing that their properties meet the requirements or that steps are in hand to address the issues.”
“Whatever the scale of the work required, be it loft insulation, hot water controls or replacement glazing, checking on the lease to identify where responsibility for the work lies and finding out what incentives and potential sources of support to fund energy efficient improvements are available is always worth the effort.”
Kingswood Residential would be pleased to offer further advice regarding EPCs and MEES, and can arrange EPCs for properties. £0