Landlords to get five years to hit net zero targets

Landlords to get five years to hit net zero targets

Landlords will be blocked from letting properties unless they upgrade them to meet net zero energy efficiency targets within five years.

Ministers are poised to announce that landlords will have to spend thousands of pounds increasing the energy performance of their properties by 2028 – or face a fine of up to £30,000.

It is understood that the Government plans to force up to two million landlords to increase the Energy Performance Certificate rating of their properties to a minimum of a C standard to help reduce the nation's carbon footprint.

It means buy-to-let investors could have to spend thousands of pounds installing insulation or eco-friendly devices such as heat pumps and solar panels to make their properties more energy efficient.

Currently, all privately rented homes in England and Wales need to meet a minimum energy performance of band E before they can be let.

Ministers had previously proposed a deadline of 2025 for newly-let rentals to achieve an energy performance rating of at least a C, and a deadline of 2028 for all other rented properties.

But more than two years after the consultation was launched in early 2021, it is now understood that the deadline will be set at least three years later in 2028 and apply to all rental properties.

It comes after the Government was warned that the target was unachievable and risked driving landlords to sell up.

One industry source told The Telegraph that around 3,500 properties would need to be upgraded every day to meet the 2025 deadline, adding: “It’s a monumental challenge.”

The Government has been working with banks on the proposals, which will cap the maximum spend per property at £10,000 – regardless of whether or not the C rating is achieved. Landlords of higher value properties face paying more, as it is understood that this cap could now work on a sliding scale, starting at £5,000, and rising in line with the rental value of the property.

There are fears that older properties will require much more investment to upgrade. The UK is home to one of Europe’s oldest housing stocks, with over half (52pc) of homes in England built before 1965.

One property insider said: “The private rental sector will struggle without major investment to help build a supply chain and help finance the most challenging retrofits.”

Chris Norris, policy director for the National Residential Landlords Association, said: “With several years now having passed since the closure of the Government’s consultation on energy efficiency standards in private rented housing, the sector has endured a long wait for further clarity on how landlords can meet their obligations in this area.

“More to the point it is simply not feasible for every property in the market to be retrofitted to meet an EPC ‘C’ rating within the previously proposed timeframe.

“We are firmly of the view that rental properties must be as energy efficient as practicable. However, this can only happen if the Government takes steps to introduce bold, workable policies which take into account the financial burden incurred by many landlords looking to retrofit their properties.

“Whatever the response from ministers to the consultation exercise is, it is crucial that they adopt a pragmatic approach to matters by setting measurable, realistic energy efficiency targets.”

A source at the Department for Energy Security and Net Zero said discussions had been held with stakeholders, but no decision has yet been made.

A Government spokesman said it has consulted on energy performance targets and will publish an official response “in due course, after careful consideration of ways to make sure improvements are fair and proportionate” for both landlords and tenants.

He said: “The Government is improving energy efficiency, including across the private rented sector. Just this month we announced the allocation of £1.8bn worth of support to make homes more energy efficient and the number of homes in England with an energy efficiency rating of C or above has gone from 16pc in 2011 to 47pc in 2022.”