Government moves to boost energy efficiency in privately rented homes by 2030

The government is consulting on raising the minimum energy efficiency standard (MEES) in the residential private rented sector (more info here). This is separate to the now closed consultation on the Energy Performance Buildings Framework that proposed changes to the metrics used to calculate EPC ratings.

Background

There are 4.6 million households in the private rented sector in England, equating to 19% of all households. In 2022, 55% of privately rented homes in England were below EPC rating C, compared to 30% of socially rented homes. 

The previous government consulted in 2020 on proposals to raise MEES, but a response to the consultation was never published. 

Current MEES requirements for privately rented houses

Since April 2020, all privately rented homes in England and Wales have been required to meet an EPC rating E before they can be let. Landlords are required to spend up to a maximum of £3,500 per property on improvements to achieve this unless an exemption applies.

Key proposals

• The government's preferred approach is to require residential houses to achieve an equivalent of EPC rating C using the current EPC metrics. This higher standard would apply to new tenancies from 2028 and all tenancies would be required to comply by 2030.
• As a transition measure, a rating of C given in an EPC commissioned before 2026, when the metrics are expected to change, will be accepted as evidence of MEES compliance.
• Where a property has an EPC rating of below C in an EPC commissioned before 2026, landlords will be required to commission a new EPC before taking action to comply with the higher MEES requirement.
• A cap of £15,000 per property on the costs of improvements to meet the raised standard. If an EPC rating of C is not achieved after the cap has been spent on improvement measures, then the landlord could register for a ten-year exemption from the raised standard. The current cap is £3,500 and the exemption lasts 5 years. The 2020 consultation proposed a cap of £10,000 per property.
• Expansion of the MEES regulations to require short-term lets, for example holiday accommodation, to meet the same standards as privately rented homes.

Conclusion

Considering that homes currently contribute to 16% of the total greenhouse gas emissions in the UK and the government's commitment to reducing fuel poverty, the likelihood of many of these consultation proposals being implemented appears strong.