BTL Landlords Must Hit Net Zero Targets Or Face Ban Letting Properties

There is growing speculation that the deadline for landlords to meet new minimum energy efficiency standards for new tenants will be extended until 2028, and will now apply to all rental properties. Landlords failing to comply will face a fine of up to £30,000.

During the tail end of 2021, the government consulted on a tightening of the rules which would require landlords to ensure all their properties have a minimum Energy Performance Certificate (EPC) rating of C, rather than the current rating of E.

Under the original proposals, the change would be enforced from April 2025 for new tenancies and from April 2028 for existing tenancies.

But with no major update since the consultation ended two years ago, The Telegraph reports that the 2025 date will be dropped, and replaced with a new deadline of 2028, giving landlords an extra three years to raise the ratings where needed.

Once implemented, up to two million landlords could reportedly be faced with having to increase the EPC rating.

Although nothing has yet been confirmed, it is thought the news could be officially revealed as soon as today, which happens to be ‘Energy Security Day’.

Goodlord and Vouch have welcomed the anticipated announcement.

Rik Smith, head of tenancy services at Goodlord, commented: “It’s absolutely right to take steps towards ensuring all national housing stock is more energy efficient and better insulated. It’s not only the right thing for the planet but will also help lower bills for tenants and landlords in the long term. I’m sure the market will welcome the proposed extended deadline to get properties up to standard, but there’s an enormous amount to do before then.

“The energy efficiency task force has only just been assembled, so they will need to get up to speed extremely quickly if landlords are to be supported in this transition, and the EPC methodology also needs a significant overhaul to ensure it’s accurate and fit for purpose if it’s to be used as such a fundamental lynchpin in our housing strategy.

“Landlords across the market are already feeling pressure on many fronts, including rising mortgage rates, so we don’t want a lack of required infrastructure or not fit-for-purpose guidelines to lead them into leaving the sector.”

Tom Goodman, MD at Vouch, added: “With all market regulation, it’s vital to balance long- and short-term considerations. The last thing the sector needs is another push factor encouraging landlords to sell-up – there is already too tight a squeeze on rental stock. What we need now is a balanced and supportive approach from the Government on next steps, so that landlords are incentivised to make these upgrades and can afford them.”

But the head of My Property Box, Ben Quaintrell, has described government energy efficiency proposals as ‘unachievable’.

He believes that any proposal to bring the Energy Performance Certificate rating of rented homes from E to C will require huge investment that is far outside the means of many private landlords.

Quaintrell, whose estate agency group operates across the North East of England and North Yorkshire, said: “Improving the energy efficiency of UK homes is important, but this requires many thousands of pounds worth of investment within a very short timeframe.

“Achieving net zero energy efficiency targets in modern homes is relatively straight forward but the majority of our housing stock is pre-1960s and require huge investment.

“For example, many terraced houses were built with walls one brick deep while others don’t have the necessary minimum gaps for cavity wall insulation.

“The onus must not be on private landlords to carry the can, rather there needs to be a UK wide government investment plan that acts as a workable incentive – unlike its flagship Green Homes Grant that was scrapped after just six months in 2021.

“If enacted, these measures will only drive even more private landlords out of the sector at a time when demand is outstripping supply, which is leading to rising rents and placing even more pressure on tenants.

“There is no doubt this country does need to improve the energy efficiency of homes but it needs a workable government-led investment strategy which takes place over a more realistic time period.

“Energy efficiency has been discussed at all levels for many years without any real action. To suddenly expect landlords to find many thousands of pounds to raise EPC ratings from E to C in just five years is simply unachievable and will negatively impact the rental sector, which so many depend upon.”

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