What is it?

The Minimum Energy Performance of Buildings (No. 2) Bill (“the Bill”), which extends to England and Wales only, will make provision to increase the energy performance of buildings, to include domestic premises, privately rented properties, owner occupied properties, social housing, new homes and rented non-domestic buildings.

The proposed requirements from the UK government are part of the drive to make homes more energy efficient and help reach net zero by 2050.

In this legal update we focus on the proposed changes to energy efficiency requirements for privately rented properties only. The full text of the Bill can be found here.

What are the proposals in the Bill?

In relation to privately rented properties, the Secretary of State must amend the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 to require that:

1. All new tenancies must have an energy efficiency performance of at least EPC Band C from 31 December 2025; and

2. All existing tenancies must be at least EPC Band C from 31 December 2028 where practical, cost-effective and affordable.

How does this compare to the current regulations?

The Minimum Energy Efficiency Standards (“MEES”), which came into force on 1 April 2018, have prevented landlords from granting new tenancies if their property has an energy efficiency rating of less than E. Further information about the MEES can be found in our previous legal update here. EPCs are valid for ten years.

What are the consequences of failing to comply with the Act when passed?

Ministers are considering a punishment for landlords by way of a fine of up to £30,000 (previously £5,000 for a breach of EPC regulations) if they fail to comply with the Act.

What stage has the bill reached?

The Bill is still in the very early stages. The government opened a consultation in September 2020, although they have yet to publish the results from that consultation. The Bill was initially drafted in July 2021 and the first reading in the House of Commons took place on 20 July 2021. A second reading took place on 6 May 2022 and the Committee stage is awaited. Following the Committee stage, there will be a report and a third reading before the Bill moves from the House of Commons to the House of Lords. It is perceivable therefore that it is going to take quite some time before the Bill is passed, and quite possible that the deadline dates will be pushed back again.

It has recently been claimed by a Daily Telegraph report that all rental properties will have to reach the minimum standard by 2028 but nothing official has been published to corroborate this. We will continue to watch the progress of the Bill through Parliament and provide updates when we have more information.

Conclusion

Despite the fact that the deadlines are quite some way off, landlords should nonetheless be aware of the provisions in the Bill. It is also worthwhile carefully considering the EPC rating of properties when purchasing new buy to let properties in the intervening period.

If you have any questions or would like any further information on this week’s Legal Update, please contact a member of the team on 01435 897297 or info@kdllaw.com.

Disclaimer

This Legal Update describes the position in law as at the date of this article and care should be taken to note any subsequent amendments to the position as set out above.  The Legal Update is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of KDL Law or by KDL Law as a whole.

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