The Daily Telegraph claims the government is considering fining landlords up to £30,000 if they fail to upgrade their properties to a minimum band C by a revised deadline of 2028. It is reported that discussions had been held with stakeholders on the proposals, but ‘no decision has yet been made’.
The Department for Energy Security and Net Zero has previously given a deadline of 2025 for properties let under new tenancies to have an EPC rating of at least C and another deadline of 2028 for existing tenancies.
If the Daily Telegraph’s report is correct, all rental properties will have to reach a minimum EPC rating of C by 2028.
The proposed minimum EPC rating is a major issue for landlords who are concerned about the costs of the works and the lack of details from the government.
Research by Knight Frank research found that the average upgrade of a dwelling to at least a band C is £9,260. Properties with an EPC rating of D would require £5,500 and this figure doubles to over £10,000 on average for properties in bands F and G.
It is estimated that currently 60% of private rented properties have a EPC rating of D or less. This equates to 2.8 million households requiring works out of the 4.8 million households in the private rented sector.
Currently under the Domestic Minimum Energy Efficiency Standard (MEES) Regulations there is an exemption if improvement works cost more than £3,500. However, it is expected a the cap for exemption will be increased to £10,000. This is almost a 300% increase and many reports state landlords will be unable to fund the works and considering exiting the market.
Many landlords in areas outside of London and the South East have properties which are much lower in value and they are seen to be unfairly disadvantaged as the cost of improvement works represents a greater proportion of the value of the property.
The government has also been criticised by landlords and agents wishing to prepare for the deadlines as it has fail to provided landlords with information despite a consultation taking place in 2021.