An update on EPC Regulations (otherwise known as MEES) from 20th September 2023

Background

These regulations prevented landlords of both domestic and non-domestic property from granting a new tenancy without a minimum energy rating of E (unless exempt).

In addition, since 1^st April 2023, landlords have been prohibited from continuing to let domestic and non-domestic property which is already let if that property does not have a minimum energy rating of E (unless an exemption applies).

What happened next?

In 2021, the Government published draft proposals to again improve the energy performance of both domestic and non-domestic properties. These proposals formed part of the wider aim to bring the UK to net zero by 2050.

These new proposals suggested a two stage approach as follows:

• From 1^st April 2027, all non-domestic rented properties would be required to have a minimum EPC rating of C (or register a valid exemption); and
• From 1^st April 2030, all non-domestic rented properties would be required to have been further improved to have a minimum EPC rating of B (or register a valid exemption).

Earlier deadlines (of 1^st April 2025 and 1^st April 2028 respectively) were also proposed for domestic property.

What has happened now?

On 20^th September 2023, Rishi Sunak confirmed that the 2021 proposals have been scrapped, using the following reasoning:

“…under current plans, some property owners would’ve been forced to make expensive upgrades in just two years’ time. For a semi-detached house in Salisbury, you could be looking at a bill of £8,000. And even if you’re only renting, you’ll more than likely see some of that passed on in higher rents. That’s just wrong. So those plans will be scrapped…”

This has been mostly welcome news to those landlords that had anticipated costly improvements but somewhat frustrating to those that had already paid for expensive upgrades.

Where does that leave us?

Unfortunately we are yet to receive a clear alternative plan. This leaves both tenants and landlords in a state of uncertainty. In order to meet the net zero target of 2050, further changes are inevitable. However for now, we will have to watch this space.