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Over recent years, the government has shifted the goal posts several times regarding energy efficiency requirements for private rented accommodation. If you manage a rental property and feel confused about your responsibilities in 2024 and beyond, you’re not alone.
We’ve compiled this handy guide to everything landlords need to know about their energy efficiency obligations. It will help you understand where you stand now and how to plan for the future effectively.
Importance of energy efficiency in the private rental sector
As the climate crisis escalates and the UK continues to face high energy costs, it’s become more important than ever that landlords prioritise enhancing the energy efficiency of private rental homes.
Did you know that in the UK, 16% of carbon emissions come from our homes? The UK government aims to achieve net zero greenhouse gas emissions by 2050, a target it won’t hit without the cooperation of landlords in the private rental sector. Landlords must commit to helping achieve these national goals and doing their part to increase energy efficiency in our country’s homes and fight climate change.
While increasing energy efficiency is a responsible way to protect our planet for future generations, it is also a strategic move that can help landlords boost the value of their property and increase tenant demand. Tenants are more attracted to energy-efficient properties as they tend to be better insulated, warmer, and more comfortable to live in. While energy prices have started to drop in 2024, they are still very high, so tenants favour properties with good EPC ratings as they can help them save on their energy bills. A high energy efficiency rating can help your rental property stand out from others in the area, increasing demand and minimising void periods.
Landlord responsibilities regarding energy efficiency in 2024
In 2024, landlords play a crucial role in improving the energy efficiency of the UK’s homes. As a landlord, you should be completely clear about your responsibilities regarding energy efficiency. In this instance, ignorance isn’t bliss; in fact, it could result in a hefty fine! Penalties for failing to comply with energy efficiency regulations range from £500 to a whopping £30,000, so it’s in your best interest to make sure you’re informed.
Minimum Energy Efficiency Standards (MEES)
Staying compliant and boosting energy efficiency starts with understanding and adhering to the Domestic Minimum Energy Efficiency Standard (MEES) Regulations 2018. These regulations apply to all assured, regulated, and domestic agricultural tenancies legally required to have an EPC. According to the MEES, all domestic rental properties must have a minimum energy performance certificate (EPC) rating of E. That includes existing tenancies, not just new ones.
Energy Performance Certificate (EPC)
This leads nicely to our next point. All landlords must maintain a valid EPC for their rental property and provide tenants with a copy of the certificate when they first move into the property. To get an EPC, you must have your rental property assessed by an accredited assessor. An EPC assessment and certificate usually costs between £60 and £120. Once the assessment has been completed, you’ll be issued with a digital EPC certificate that tells you what rating the property achieved. All EPCs feature an expiry date and must be renewed every ten years or by the expiry date on the certificate, whichever comes first.
The EPC also features a section that lists recommendations for how to improve the property’s energy performance. These recommendations are particularly useful for landlords who wish to enhance their property’s energy efficiency or whose property falls below the minimum E rating.
Improve the energy efficiency of properties rated F or G
If, after an EPC assessment, your property is rated F or G, you cannot legally rent it out to tenants before making improvements to increase its rating unless the property has a valid exemption.
Can I get an exemption from MEES?
Landlords may only get an exemption from the minimum energy efficiency standards under very specific circumstances.
There are seven exemptions that can be registered, these are:
- High cost – If the cost of the improvements necessary exceeds the cost cap, which currently stands at £3,500.
- 7-year payback – If the cost of the improvements does not meet the government’s 7-year payback test (only applies to non-domestic properties).
- All improvements made – If all the “relevant energy efficiency improvements” have been made, or none are recommended, and the property still falls below the minimum rating.
- Wall insulation – If certain wall insulation systems are not suitable.
- Consent – If a third party has denied consent for the improvements.
- Devaluation – If the installation of energy efficiency measures would reduce the property’s market value by more than 5%.
- New landlord – New landlords have a 6-month temporary exemption.
Are MEES changing?
Staying on top of the changes to the Minimum Energy Efficiency Standards (MEES) is becoming quite challenging as the government keeps shifting the goalposts.
Let’s look at the timeline of changes to MEES to understand where things currently stand.
2015: The government introduces the Minimum Energy Efficiency Standards (MEES) Regulations
The MEES Regulations were introduced with the aim of improving the quality of privately rented buildings and cutting the UK’s carbon emissions.
2018: The minimum rating of ‘E’ or above was introduced for all new tenancies.
A maximum cost cap of £3,500, excluding funding, is applied. This means that if, after spending £3,500 on energy efficiency improvements, the property still does not meet the required standards, the landlord can register an exemption.
2020: The minimum rating of ‘E’ was extended to all tenancies, not just new ones.
Any property with an EPC rating of F or G can no longer be rented out unless the landlord has an exemption. If a landlord fails to comply, their local authority could serve a compliance notice.
2021: The government announces that from 2025, all new tenancies will need a rating of C or above, which will be extended to all tenancies from 2028.
The proposed changes included raising the cost cap from £3,500 to £10,000 per property and introducing a ‘fabric first’ policy, where improvements to the building’s insulation, windows, and doors should be completed before additional measures like a new boiler.
2023: In a turn of events, the changes planned for 2025 and beyond are scrapped.
On September 20th, 2023, Rishi Sunak announced that he was scrapping the proposed changes to MEES to help ease the pressure of the cost-of-living crisis on landlords but encouraged them to consider still making energy efficiency improvements where possible.
The frequency with which energy efficiency standards have changed underscores how important it is for landlords to stay up to date with the status and future direction of minimum energy efficiency standards to ensure compliance and avoid potential penalties.
So, should landlords still invest in energy efficiency?
Now that the 2025 changes to the MEES have been scrapped, many landlords have put energy efficiency upgrades on the backburner once again.
However, with a general election on the horizon, there’s a strong possibility that the changes to MEES that Rishi Sunak scrapped could still be bought back—especially if Labour wins the next general election. This uncertainty, combined with the mounting governmental pressure to slash carbon emissions and the escalating climate crisis, means energy efficiency improvements are still a smart move for UK landlords.
Improving energy efficiency is more than just a compliance measure; it’s an ethical investment that can enhance the appeal of your property. A growing number of conscientious tenants are prioritising sustainability and seeking ways of living that will minimise their environmental impact.
So, while the pressure seems to be off landlords right now, those who have the means to invest in energy efficiency improvements should consider them as a strategic investment for the future. This will not only prepare them for potential regulatory changes but also position their rental business for long-term success and sustainability.
Making energy efficiency improvements to rental properties
If you’re thinking about improving your rental property to enhance its energy efficiency rating, the best place to start is by consulting the recommendations on your energy performance certificate.
The recommendations usually begin with those that can be made to the property’s fabric, such as insulation and improvements to windows and doors. These kinds of improvements can be expensive, but they will make the biggest difference to the property’s energy performance and the biggest savings on energy bills. Your EPC certificate will list how much you can expect to pay for the improvements, how much they will typically save on energy per year, and the EPC rating your property could achieve after the improvement has been made.
Typical recommendations include:
Insulate the roof – Approximately 20% of a property’s heat is lost through its roof. As well as increasing the property’s energy efficiency, roof insulation can also provide some relief from noise pollution.
Insulate the walls – On average,35–40% of a property’s heat is lost through its walls. Installing internal or external wall insulation can significantly enhance tenant comfort and reduce energy consumption and bills.
Insulate floors – Around 10% of a property’s heat is lost through the floor. Installing floor insulation helps to reduce heat loss during the winter and heat gain in the summer.
Invest in double or triple-glazed windows and doors – Did you know that 18% of heat loss occurs through windows, and heat is lost twice as fast through single-glazed windows thanthrough double-glazed ones? If your property already has double glazing installed, upgrading to triple glazing could increase the window’s thermal efficiency by up to 40%!
Draught proofing – Sealing gaps around windows, doors, and floors is a simple yet effective way to prevent heat loss and cut energy consumption.
Update boiler or heating system – Modern condensing boilers must be at least 92% efficient, compared to the 70% efficiency of models that are over ten years old. Upgrading a property’s old boiler and installing new energy-efficient radiators and a smart thermostat can help reduce energy bills and carbon emissions while increasing tenant comfort.
Hot water lagging and cylinder insulation – Insulating a property’s hot water tank and piping can help to keep water hotter for longer and reduce the amount of heat lost to the surrounding air.
Energy-efficient lighting – Did you know that LED lightbulbs use 90% less energy and last up to 25 times longer than traditional incandescent bulbs?
Install renewable energy sources – Adopting renewable energy sources by installing a heat pump or solar panels is a significant commitment, but it can drastically reduce your rental property’s reliance on fossil fuels. This strategic move can position you as an environmentally responsible landlord, differentiate your property from competitors, and attract eco-conscious tenants.
Read our blog, ‘Tips for Creating an Eco-Friendly Rental Property’, for more advice on improving your property’s eco credentials.
It’s clear that landlords play a pivotal role in addressing the climate crisis and helping the government achieve net zero emissions by 2050. Understanding and complying with MEES Regulations and maintaining a valid EPC is at the core of a landlord’s responsibilities. Beyond this, proactively making improvements helps landlords prepare their properties for future changes to energy efficiency regulations and boost their value and appeal amid the growing demand for sustainable homes.
