Buy-To-Let Landlords Hit With New Energy Efficiency Rules

There are now a record 2.5 million buy-to-let investors in the UK, according to Ludlowthompson. In just one year, the number of buy-to-let investors in the country has grown by 5%, which proves that the market is strong. But, this April, the British government implemented tougher new rules regarding energy efficiency which will see buy-to-let landlords potentially facing thousands in costs.

Energy efficiency standards

Last April, buy-to-let investors were obliged to provide accommodation with a minimum energy performance rating (EPC) of ‘E’. If their property fell outside of this, they were able to claim funding from the government so that the necessary work could be carried out to bring the rating up to an E or above. However, the 1 April 2019 saw this benefit abolished. Instead, buy-to-let investors must now pay for the energy efficiency work to be completed out of their own pocket.

The £3,500 rule

Should a buy-to-let landlord believe that increasing the energy efficiency of their property to an E would cost more than £3,500, they will be exempt from having to have the work completed. However, they must obtain evidence proving that costs will exceed this figure. And they may still be required to complete improvements up to the value of £3,500. Meanwhile, failure to comply with the government’s new energy efficiency standards will result in buy-to-let landlords being issued a £5,000 fine.

Minimal impact

Of the 1,207,000 domestic EPCs issued in the year ending June 2018, just 7% of existing residential buildings had an EPC below E. Meanwhile, 0.55% of new build domestic dwellings were issued an EPC of F or G. This is, therefore, good news for landlords as there are a limited amount of them who will be impacted by these new regulations. However, it does highlight the need for individuals to seek out guidance on the buy-to-let process. Reputable high street lenders are typically highly knowledgeable on the ins and outs of purchasing buy-to-let property and will ensure that you’re getting a good deal on your mortgage. This is all the more important if you need to set some cash aside for energy efficiency improvements.

More changes to come

At present, the Minimum Energy Efficiency Standards (MEES) in the UK stipulate that a new tenancy cannot get underway if the EPC rating of the property is poorer than an E. However, this will change on 1 April 2020, when new legislation will come into play forcing all tenancies to have an EPC of an E or greater. With big changes ahead, it makes sense for buy-to-let landlords to check the energy status of their properties and to start work on improving those that don’t meet the UK’s new energy efficiency expectations.

Buy-to-let investments are currently at an all-time high in Britain. But, with new laws stating that these properties must offer better energy efficiency to tenants, some landlords may be put off by the rising costs of buy-to-let. However, it’s important to note that this move aims to improve the quality of living for tenants and will benefit landlords’ investments in the long-term.

Post Author: martin

Martin is an enthusiastic programmer, a webdeveloper and a young entrepreneur. He is intereted into computers for a long time. In the age of 10 he has programmed his first website and since then he has been working on web technologies until now. He is the Founder and Editor-in-Chief of and Online Magazines. His colleagues appreciate him as a passionate workhorse, a fan of new technologies, an eternal optimist and a dreamer, but especially the soul of the team for whom he can do anything in the world.

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