Government announces planned changes to MEES (PRS) Regulations

Today the Department for Business, Energy and Industrial Strategy (BEIS) announced that they plan to amend the regulations requiring landlords to install energy efficiency measures to domestic homes.

Since April this year, landlords who own some of the coldest privately rented homes have been required to improve these properties with energy efficiency measures where support is available to cover the costs. The new measures, announced today following a public consultation, will go further requiring landlords to contribute to the cost of upgrades.

The consultation considered what the cost cap should be set at. The Government have concluded that the cap will be set at £3,500 (inc of VAT). 

Announcing the planned amendment, Energy and Clean Growth Minister Claire Perry said:

“While the vast majority of landlords take great pride in the properties they own, a minority still rent out housing that is difficult to keep warm. Upgrading these homes so they are more energy efficient is one of the most effective ways to tackle fuel poverty and help bring down bills for their tenants, saving them £180 a year.

Everyone should be protected against the cold in their own home and today’s announcement will bring this reality closer.”

The key decisions included:

  • The introduction of a capped landlord contribution of £3,500 (inclusive of VAT)
  • Removal of the Consent Exemption currently available where a sitting tenant does not consent to a Green Deal charge
  • Inclusion of an evidential requirement for the registration of a ‘high cost’ exemption
  • Curtailment of the period of validity of previously registered ‘no cost’ exemptions
  • Other policy decisions relate to the operational efficacy of the Regulations.

Elmhurst has quickly reviewed the papers and the following is a summary of the detail:

Subject to timely Parliamentary approval, the amending regulations will be implemented as follows:

  1. Introduce a landlord financial contribution amendment with the landlord contribution capped at £3,500 and inclusive of VAT;
  2. Any investment in energy efficiency made since October 2017 to be counted within the cap;
  3. Any available third-party funding, including Green Deal finance and local authority grant funding, to be counted within the cap;
  4. Establish a new ‘high cost’ exemption to be available where a substandard property cannot be improved to E for £3,500 or less, and require the submission of three installer quotes where a landlord is registering such a ‘high cost’ exemption;
  5. Remove the current ‘no cost to the landlord’ provision, and curtail existing ‘no cost’ exemptions so that they will end on a planned date of April 2020;
  6. Remove the consent exemption currently available under Regulation 31(1)(a)(ii) where a tenant has withheld consent to a Green Deal finance plan;
  7. Upon enactment, the amended regulations will apply upon the granting of:
    1. a new tenancy to a new tenant, and,
    2. a new tenancy to an existing tenant.
  8. From 2020, the amended regulations will apply to all privately rented property in scope of the regulations, in line with the existing regulatory ‘backstop’ date.

Stuart Fairlie Technical & Operations Director of Elmhurst stated “We welcome the news that the removal of the ‘no upfront cost’ to the landlord clause is to be removed for the regulations. This certainly makes the regulations easier to understand and implement. As the Clean Growth Strategy document has a mission to improve all homes in the private rental sector to band C by 2030, we believe that this will certainly help make some of our most inefficient homes warmer and cheaper to run. As per usual we will keep our members posted as soon as we find out more details". 

Notes to editors:

When the amended regulations come into force, to register a ‘high cost’ exemption where the property cannot be improved to a band E for £3,500 or less, the landlord would be required to submit three installer quotes.

Current regulations, which came into force on 1 April 2018, require landlords of privately rented domestic and non-domestic properties in England or Wales to ensure their properties reach at least an Energy Performance Certificate (EPC) rating of E before granting a new tenancy to new or existing tenants. Today’s announcement applies to domestic properties.

For privately rented homes in breach of the regulations, local authorities can use enforcement measures or issue a fine which is capped at £5,000. Local authorities also have powers to issue a publication penalty which would see the details of a landlord breach published on the PRS Exemptions Register.

For more info:

Article Published: 5th November 2018

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