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Letting Low Energy Efficiency Property To Be Made Illegal

Letting Low Energy Efficiency Property To Be Made Illegal
Posted on June 29, 2011 by editor
Posted in Money & Tax, Politics Of Property, UK Property Market Comment Tagged , , , , , , , ,

Hot on the heels of our recent blog about the new EPC Green Deal regulations, we have today seen more news about energy efficiency measures that will effect some landlords.

OK then, we know the current government has a beef about energy efficiency in rented property, and how much governments love to bow down to all things Euro, but seriously, cracking down on low efficiently rated property lets by making it unlawful to rent them out is just ludicrous. Nothing big was ever achieved using the stick rather than the carrot.

New Rules

Any property with an ‘F’ or ‘G’ rating will become unlawful to rent out. Hang on, lets think about this for a second. If you were a landlord who owns one of these properties would you

a) be likely to have an EPC on it in the first place?

b) bother whether the govt says you can rent it or not?

c) wonder how the govt will even get know or police it?

If you are one of those landlords, it’s more likely that you will just do nothing. According to government stats, there are about 681,000 properties in these bands, but there are no statistics showing how many are buy to lets! If the data does not exist then how can they make this viable? On the surface it seems a bit of a woolly idea.

Now we love to highlight Eco issues on this blog, so we are not anti Green by any stretch, however I just can’t envisage how this would work in practice or how it will be policed.

Since buy to let was invented, properties falling into these bands have halved, which means plenty of landlords are already keen to keep their properties in better nick without the battering ram of enforced updating via a loan on the property to add green features like insulation.

What Classifies As Reasonable?

And, if this isn’t enough, as the new Green Deal kicks in we will see rules such as “landlords not being able to refuse reasonable requests from tenants, or local authorities acting on behalf of tenants, to improve their property.”

Hmm so I’m thinking….what the heck will qualify as “reasonable?” Because, as any landlord knows, tenants can be anything but reasonable at times. And that term in particular is open to abuse if it’s not clarified. Now, it does not stop there either, in further statements surrounding the Green Deal government officials said they would “get tough” on landlords who don’t comply.  Which leads to the question; Get tough how?

They have stated that they want the tenant to ‘have a voice’ so that those living in draughty, poorly insulated homes are more protected. Not a bad idea in essence, but forcing a loan on a property paid back from the energy savings? I’m not feeling the love. What do you think? please add your comments below :-)

If you don’t know what the Green Deal is, you can read more about it here: www.decc.gov.uk or watch the short video of Nick Clegg talking about it below:


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  • http://twitter.com/linniR Linn Rafferty

    I thought I’d reply to your question “if you were a landlord who owns an For G properties, would you…  be likely to have an EPC for it?”

    Don’t go away thinking that it’s only “slum properties” that are F & G rated.  I could probably find plenty of high-end properties now being advertised at high rents – all those high ceiling Victorian flat conversions, innumerable terraces in fashionable London locations; many of them well maintained and decorated, but F or G just the same.
    And yes, of course they should have an EPC, since it’s already illegal to let a property without one.  Unfortunately, this legal requirement isn’t that well enforced, and I think that goes to the heart of the problem.  Unless the legal requirements on rentals are enforced, why should landlords bother to obey them? I think that key to enforcing this will be consumer awareness. So long as prospective tenants don’t ask to see the EPC, landlords/agents won’t bother showing it to them.  If they don’t appreciate that a high energy rating makes the difference between being able to afford both rent and fuel bills, and only having enough money for one, they will continue to miss out.

    • http://www.mypropertymentor.co.uk/ Roberta Ward

      Yes of course its not only slum landlords that this will apply to. We did already write yesterday about the EPC side of the Green Deal.I have never met or heard of anyone who rents property ever having a tenant who has asked about the EPC. There is no consumer awareness.However, those LLs in the fashionable districts are making enough rent to upgrade their properties so there is no real reason not to other than pure cost over gain.Not all LLs are that fortunate and are only just hanging on. In my experience, tenants care about one thing- can they afford cost of a rental in an area where they want to live.
      thanks for commenting

      • http://twitter.com/linniR Linn Rafferty

        yes, and it’s in the landlord’s best interest that they can afford it, no?  That’s why it’s important that prospective tenants consider if they can afford both rent and bills – i.e. look at the EPC, which gives them and indication of the latter.  They need to be able to afford both to live comfortably at the property, and not default on the rent.

  • http://twitter.com/QuidosPhilip Philip Salaman

    Whilst I agree that not allowing the letting of F & G rated properties is a step too far, it will encourage Landlords to upgrade their properties for the benefit of the tenants. The Green Deal will essentially mean that the Landlord does not fund these works, and will actually benefit from the appreciation in asset value – all paid for by the tenant!

    Currently the central register of EPCs does record what type of tenancy the property is, although not as specific as a buy-to-let; is this significant?

    Finally in response to “nothing big was ever achieved by using the stick rather than the carrot” – really? I think it is (regrettably) the other way around! The only thing I can think of that has been implemented without government regulation is the re-using of plastic bags in supermarkets!

    • http://www.mypropertymentor.co.uk/ Roberta Ward

      Ok then, consider this, what of the property has been wrongly assessed? Currently EPCs can remain on the govt system for 10 years, does this mean that for 10 years you would not be able to rent out your property? What about sale, would it affect that? Who knows. That’s the point.
      There is not enough data to answer even the simplest of questions.
      Energy assessors can be a mixed bag, some are very diligent and some are not.

      What is they decide to link some form of tax to it later on?
      As I said in the blog, about 50% of landlords have already done improvements since BTL was invented-without prompting or bashing with the green stick.
      The persons setting this thing up need to be aware that this is peoples livelyhoods not just a quick tick box for the EU Green compliance.

      • http://twitter.com/linniR Linn Rafferty

        Roberta, if the owner considers the property has been wrongly assessed, they have two options:
        complain to the assessor’s accreditation scheme
        pay for a 2nd opinion – EPCs don’t cost a lot!

        • http://www.mypropertymentor.co.uk/ Roberta Ward

          Yes it’s a valid point that a complaint can be made. However, having to pay for a second, regardless of cost, kind of makes my point that there are big differences in the type and value of an EPC.
          Dont get me wrong, Im not against this per se, I just feel it has been announced too soon-before it has been properly thought through.
          Lastly, I beg to differ, but no tenant I have ever come across has looked at the EPC as a means to figure out if they can afford the property. that is just a misguided utopia to validate the existence of the document in the first place. I can promise you, tenants do not care about it at all- as I have said below in previous replies.
          If you dont believe me- ask any letting agent.

          • http://twitter.com/QuidosPhilip Philip Salaman

            Too soon?!? This is (at present) not confirmed that it will be in the Energy Bill, and if it is then likely it will be 2018 (perhaps 2016) when it will be implemented! 

            Whilst I agree most tenants do not care about the EPC, they will. Huge rises in energy prices are coming, and efficiency will become an important marketing point. But, surely Lettings Agents are interested in letting more properties, and hence taking advantage of the “Green agenda” is a way to increase business?

            So, whilst Letting Agents may well ignore energy efficiency at the moment, I suspect that may quickly become a thing of the past.

          • http://twitter.com/linniR Linn Rafferty

            Roberta, we don’t differ on these points, so no need to beg. ;-)

            We agree that tenants don’t ask to see the EPC at present… my point is that they should do!  It could make the difference between being to afford to live there, and not being able to.  
            It is in the landlord’s interest to be sure that the tenant can afford to pay the rent – and the size of the fuel bills, which the EPC signposts, contributes to affordability for the tenant, and more certainty that the rent will be paid for the landlord.  As Philip says, rising fuel prices are going to tip the balance so that clients do take more interest in the EPC – give it time!

            I agree that there are, currently, some EPCs which are plain wrong. However, if customers don’t complain about the assessors who do the incorrect EPCs, and ultimately get them struck off, how are the ones who do a good job going to get any work?

            • http://www.mypropertymentor.co.uk/ Roberta Ward

              Can I ask if you have any BTL properties? Tenants don’t tend to consider the cost of bills as much as you might think, and they are even less likely to understand what the ratings mean on an EPC! Most owners dont understand them let alone tenants.
              Maybe rising fuel cost will tip the balance, but not for a long time yet.

              And, knowing what I do about tenants, they are more likely to put up with higher bills if they can get to live in a specific area that they want, regardless of the cost.And, it’s likely that in the future rents will go higher if the landlords decide to take advantage of the EPC rulings isnt it? Landlords will charge a premium for it no doubt. How will tenants fare then I wonder?

  • http://www.justepc.co.uk/landlord-epcs.html Powlo01260

    Surely these landlords who don’t care about the Efficiency Ratings of their inneficient Carbon belching properties should be highlighted and vilified? If we don’t make them act how on earth will they conform? Would it be wiser to simply let them do what they like and continue to rent poor quality, costly and environmentally unsustainable properties that act like a spanner in the works on the mission to reduce the UK’s Carbon emissions?  

    • http://www.mypropertymentor.co.uk/ Roberta Ward

      It’s not as simple as caring or not caring about carbon efficiency. Much of our housing stock is old, and retrofitting green incentives can be expensive.Some green ideas just dont work for our housing stock either. As always it will be about cost versus return on the investment.As I have said in the blog, many landlords have taken up green issues, but nothing will ever be achieved overnight. Awareness is a key factor initially and then good enough incentives added in to help the process along with greater take up.

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