Wednesday 4th October 2017

One in 20 BTL homes would fail new minimum energy efficiency standards

Around 5% of buy-to-let properties are set to fail new Minimum Energy Efficient Standards (MEES) that come into effect in April 2018, unless rapid improvements are made, fresh research shows.

The 2015 Energy Efficiency Regulations set out minimum energy efficiency standards for England and Wales. These regulations make it unlawful for landlords to grant a new lease for properties that have an energy performance certificate (EPC) rating below E, from 1 April 2018, unless the property is registered as an exemption.

But somewhat worryingly, a new study by AXA has found that one in 20 rental properties pose an ‘excess cold hazard’ to residents as they fall into the worst-rated Bands F and G. This means that more than 200,000 homes are now at risk of being banned from the private rental market next April when minimum standards come into force.

Just how much these failing homes are costing tenants was revealed by analysis of their monthly bills.

The average monthly bill in a Band A rental is £61 per month, increasing to £76 in Band E, and then £112 in Bands F to G. This means that UK tenants are still paying for energy failings to the estimated tune of more than £150m a year. 

However, the survey of 1,000 UK tenants, conducted in August 2017, suggests that the private rental sector has seen a significant improvement in energy efficiency over the past two years, with the worst-rated properties in the industry having halved since 2015, when official estimates put them at one in ten.

More than half of tenants surveyed by AXA said their current rentals are in bands A to C.

Gareth Howell, managing director of AXA Direct, said: “Our study has found that landlords are making significant investments into improving the energy efficiency of their properties. And this is part of a bigger trend: when we look at our surveys of tenants and landlords over the past five years, we see progress across the board – on security, maintenance and numbers with proper tenancy agreements in place.

“Many landlords we speak to are ‘accidentals’, who typically own one or two properties. They are, by and large, professionalising and investing more seriously in their tenants’ comfort and the future health of their rental properties. Pockets of failure exist in this market, but it is not the story for the 95% of landlords who are trying to do the right thing.”

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