Requirements for upcoming EPC and MEES changes
The private rented sector (PRS) is facing significant changes to Energy Performance Certificates (EPCs) and Minimum Energy Efficiency Standards (MEES). To help you stay ahead of the curve, here are key takeaways from our recent webinar, ensuring you're prepared for the future.
You’re better off preparing to be ready in 2028 than waiting until 2030 particularly if you run a HMO.
1. Understand the EPC overhaul
- New metrics: The current A-G rating is being overhauled with four key metrics: fabric efficiency, heating systems, smart readiness, and energy cost. This means your property’s rating could change.
- Continuous requirement: EPCs will become a continuous requirement, similar to gas safety certificates, not just when marketing a property.
- Impact: Low-carbon heating sources, like heat pumps, will be better reflected in ratings, while traditional gas boilers may see a decrease.
2. Prepare for stricter MEES:
- Focus areas: New minimum standards will target fabric efficiency, heating systems, and smart readiness.
- Cost cap: A £15,000 cost cap for fabric improvements (insulation, windows), followed by potential spending on heating and smart readiness.
- Order matters: Prioritize fabric improvements, as work on other areas won't count towards the initial cap.
3. Key deadlines and penalties:
- Timeline: Changes are expected to be confirmed in late 2026, with compliance required by 2028 for renewals and 2030 for existing tenancies.
- Increased penalties: Non-compliance could result in penalties up to £30,000.
- Act early: Preparing now can help avoid last-minute rush and potential cost increases.
4. Efficient energy upgrade - Finance
- Grant funding: Take advantage of current grant schemes (many of which ending in 2026!) to offset costs.
- Rental yield: Higher EPC ratings can lead to increased rental yields (up to 11% in some cases).
- Long term EPC's: EPC's renewed in early 2026 could be valid until 2036.
5. Consider a PAS 2035 retrofit assessment:
To be fully prepared for MEES and the proposed EPC overhaul , a PAS 2035 retrofit assessment is essential, offering comprehensive guidance on energy efficiency, damp, mould, and ventilation, which you don’t get with a normal EPC.
It is vital to get specific advice to your property as the cost and impact of energy efficiency upgrades can vary drastically between two properties of the same EPC rating.
6. Exemptions
- Third-party consent: If a tenant refuses access, you may qualify for an exemption (if they are still refusing access and are a current tenant).
- Wall insulation: If written independent expert advice indicates negative impacts, an exemption may apply.
- Property devaluation: If retrofit work devalues the property by more than 5%, an exemption is possible.
- New landlord: New landlords have 6 months to complete work or apply for an exemption after purchasing a property.
- Affordability: Government is looking to give affordability exemptions based on area, and property value and lower rent properties.
7. Actionable steps
- Remote assessment: Start with a non-intrusive remote assessment to understand your property's needs. Domna is the NRLA’s retrofit partner and can support with remote assessment as well as full on site assessments
- Full assessment: If needed, get a full PAS 2035 assessment for detailed recommendations.
- Stay informed: Keep up-to-date with the latest developments and guidance from the NRLA.
Conclusion
By understanding these changes and taking proactive steps, you can ensure your properties meet the proposed new standards and avoid potential penalties. Don't wait until the last minute – start planning your energy efficiency upgrades today.
