The Residential Letting Sector changed dramatically with a new Legislation requirement imposed from the 1st April 2018, that any newly let property required to achieve a minimum energy performance rating (EPC rating) of an E. As of the 1st April 2020 ALL properties within the residential rental sector will be included within this, making it unlawful to let a property below this rating.
In places such as Cornwall where there is a significant number of properties that fall well below an E EPC rating, concerns are beginning to rise as Landlord’s and Letting Agents alike, now face the fact that they have to adapt or no longer be able to let these properties.
Here at Cockrams Surveying, we have launched our Energy Efficiency Improvement Service as we believe that every Landlord should be able to protect their assets and be fully prepared for the new legislation updates that are coming in 2020.
So, what can be done to save the granite-built period properties that are a proud part of Cornwall’s rich history? There are Grants and Support Services that have existed for a while now, some not as effective as others. However, the introduction of EPC exemptions and such funding as the Green Deal has given options to Landlords.
These have allowed properties to be improved using available funding if an exemption is not available, to make the required improvements previously without having to pay a penny. Unfortunately, this has now been changed slightly and Landlords are now required to pay a capped amount of £3500 (including VAT). This is for complete works that are able to be made based on the advised improvements through a Green Deal Assessment Report (GDAR).
To qualify, there is something called the “Golden Rule” which is based on the overall savings that the improvements covered under the funding create and from that how much can be paid back from these savings.
For example; if the improvements made saves the property £2000 a year in its energy bills the funding provider may then want to take back £1000 out of these savings to repay the funding amount, which is repaid through the energy bill of the property. This repayment is calculated over the lifespan given to the materials that have been fitted.
If an acceptable repayment amount cannot be paid back within the lifetime of the product then it is most likely deemed as financially unviable to make such improvements. Moving forward Landlords can then most likely apply for an EPC exemption, using the GDAR as part of the evidence used for the property.
If the exemption is successful, the current legislation allows for the property to be Let for a 5 year period before you must re-apply for another EPC exemption, which is then regulated by the current legislation at the time of renewal.
Filing for an exemption may seem like a simple process. However, if you do this without the guidance of a professional PLEASE BE CAREFUL because, even if successful with the EPC Exemption, it is very important to ensure the property also meets The Homes (Fitness for Human Habitation) Act 2018. Meaning that even with an exemption your property may still be unlettable.
If all of this seems complicated and is something that you are worried about, please do not hesitate to contact us at Cockrams Surveying. We want our clients to be able to understand the process as well as be able to trust the advice and support we are able to offer to help get you and your property through this process. Feel free to contact us by telephone or email enquiry, and we can discuss the best way in which we would be able to assist you.
Legal note: This blog post is for initial advice to help landlords understand the process and what can be done. If you take action on this advice please seek professional advice.