Private rented sector and energy efficiency – Panel discussion

The challenges facing landlords

There are significant risks to landlords posed by the Minimum Energy Efficiency Standards (MEES), which mandate a minimum rating of “C” by 2030. Many properties – especially older buildings – may never achieve this rating, creating potential financial strain for landlords. While the Renters’ Rights Bill has received considerable attention, MEES presents a greater risk because it’s unavoidable for landlords to comply. There is also a shift in the landlord demographic, with smaller “hobby” landlords leaving the market and larger, more professional landlords stepping in.

While the regulations are likely positive for tenants, landlords will almost certainly face challenges with supply chain issues, costs, and timescales closer to the 2030 deadline. However, landlords who upgrade their properties to meet energy standards can create highly sought-after, cost-efficient homes that appeal to tenants, particularly by reducing their utility bills.

Green mortgages and financing solutions

The green mortgage market has evolved rapidly in recent years, from just a few green mortgage products in 2018 to more than 60 today, while cashback schemes, retrofit funding and carbon offset initiatives are becoming more common ways to help landlords manage the cost of energy efficiency upgrades. This highlights the critical importance of collaboration between lenders and landlords in navigating the complexities of energy efficiency and ensuring that properties meet the new energy standards.

There is also an ethical responsibility of lenders to ensure that rental properties are not only commercially viable but also habitable and energy efficient.

The impact of delays and supply chain issues

There is a risk of landlords waiting until the last minute to meet energy efficiency standards. This can be compared to the challenges faced when the Electrical Installation Condition Reports (EICRs) were made mandatory in 2020, leading to a shortage of electricians. Given that delays could result in fines for non-compliance, it is important for landlords to take early action.

Awaab’s Law and energy efficiency

There is an overlap between Awaab’s Law, which focuses on the health and safety of rental properties, and energy efficiency standards. Energy-efficient homes, by nature, are better equipped to manage issues like excessively cold homes. However, landlords will need to provide evidence of educating tenants on proper ventilation to avoid mould issues, showing the intersection of tenant behaviour and property conditions

Propflo is here to support homeowners and landlords in navigating these changes and ensuring that their properties meet future energy efficiency requirements.

For further insights and advice, please reach out via contact@propflo.co.uk to get a quote.