New regulations brought out by the Government in April 2018 are proving to be a problem for a lot of private landlords, with the potential prospect of some heavy fines. The Minimum Energy Efficiency Standards, known as MEES, are a new standard for both new tenancies and renewals. No property can be let if the EPC rating is below an E, and this will extend to all privately rented properties in 2020. A civil penalty can be levied for those not complying up to £4,000.
There are some exemptions available but there is the potential for Local Authorities to carry out enforcement action under HHSRS for excess cold. This would then mean the issuing of a Civil Penalty Notice and fines of up to £30,000 and even prosecution.
Some landlords are struggling to afford to make the changes required by the new standards as they were not aware they were coming and so did not make necessary changes in good time. By not improving the property, if a tenant leaves, they then risk long void periods with no rent coming in on top of having to spend out to make the changes necessary. 2% of landlords said they would continue regardless of the law changes and risk the possible £30,000 fines. As the law is in place to protect tenants, this is a risky strategy and not in the best interest of anyone in the sector. 20% of landlords said they will have to sell the property meaning even fewer homes available in an already busy marketplace.
The Residential Landlords’ Association wants the Government to allow these costs to be offset against landlords’ tax on rental profits rather than capital gains. They are also campaigning for more grants to be made available but for the 37% of landlords who cannot afford to, but need to, make improvements now, this is of little help.
If you are a private landlord and would like to be prepared and know about new rules and regulations before they arrive, or would like to check if your investments comply with the current regulation (nearly 150 different pieces), please don’t hesitate to get in touch.