Government consultation is a missed opportunity

The Department for Business, Energy & Industrial Strategy (BEIS) recently announced a consultation seeking views on amendments to the domestic Minimum Energy Efficiency Standard (MEES) Regulations within the Energy Efficiency (Private Rented Property)(England and Wales) Regulations 2015 (from now on referred to as the “minimum standard regulations”).

BEIS stated that:

“This proposal is designed to future-proof the regulations and make them as effective as possible, while protecting landlords against excessive cost burdens. With a cost-cap, domestic landlords would only need to see investment in improvements to an EPC F or G rated property up to the value of that cap. The government’s preferred cap level is £2,500 per property. A range of additional, alternative, cap options are set out in the consultation and the associated consultation impact assessment.”

Elmhurst has now analysed the consultation and has prepared a 'draft' response outlining our thoughts and opinions on this important policy. We encourage all our members to respond with their own thoughts but if you wish to give us your comments and ideas we will endeavour to cover these points in our final response.

Elmhurst’s Main Points:

  • There should be no cost cap in place
  • The UK's poorest, most energy-inefficient homes should be brought up to a band E as a minimum
  • If third party funding is obtained this should not count towards any cost cap (if a cost cap is introduced)

Paul Mayne, Elmhurst’s Head of Operations commented:

“We are very pleased to see the proposal to remove the ‘no cost to the landlord’ from domestic MEES as this is overly-complex and too reliant on the availability of local and national based funds and policies. We believe that there shouldn’t be a cost cap set for Landlords. F and G rated homes are the most energy-inefficient homes in the UK and they should all be brought up to a minimum level (band E). We are very sceptical about the cost cap being set at £2,500 as the Government’s own data analysis suggests that, on average, it will only cost £865 to improve homes up to an E rating, with this suggested price cap. In our opinion it seems very short sighted of the Government to introduce a policy that will only improve 30% of F & G rated homes up to a band E, especially as the aim is to improve all homes to band C by the 2030s.”

“After listening to our members, Elmhurst’s final response to the consultation will be to ensure that the least energy-efficient homes are brought up to an acceptable standard. For too long tenants who rent private dwellings have been overlooked in terms of energy efficiency policy, and any new policy which aims to make these homes warmer and cheaper to run should be welcomed.”

Summary of the Government’s key points of the cost-cap proposal:

  1. Proposal to remove the ‘no cost to the landlord’ principle within the current domestic minimum standard regulations.

  2. Where a landlord contribution is made to improve an F or G rated property to a band E, there would be a cap on the required energy efficiency spend so the maximum amount a landlord would have to pay, per property, would be the value of the cap - a £2,500 cap is currently proposed.

  3. Where a landlord can obtain funding for the required improvements (e.g. through ECO) they would not be required to contribute any of their own funds. A landlord would be required to contribute only what is necessary to bring the property up to an EPC Band E, or as near as technically feasible, up to the value of the cap. The Government’s analysis shows that the majority of landlords will need to pay significantly less than the cost-cap to achieve this. Where part funding can be obtained, a landlord would only have to make up the balance of the cap, and not spend an additional £2,500.

For full Details of the consultation:

Deadline for responses is 13th March 2018

Article Published: 6th March 2018

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