The Energy Act 2018 - Are You Prepared?

The Energy Act 2018 - Are You Prepared?
I know it seems like a long way off, but if you feel anything like I do, time just seems to fly by these days! Knowing how long property projects can take on most occasions, perhaps now is the time to really start preparing (and even becoming aware of) the changes which could affect you in just a couple of years time with regards to the new Energy Law coming into effect.  

The Energy Act 2018 sets out new guidelines for minimum energy efficiency requirements on Private Rented Sector properties. By April 2018, it will be illegal to let a property which has an EPC (Energy Performance Certificate) rating of 'F' or 'G'. These 2 standards are the lowest standards for energy efficiency on the EPC graph. Currently, this constitutes 13.5% of rental properties on the market in the UK. The reason for this is obvious really; to give tenants a safe, dry and warm environment in which to live.  After all, who wouldn't want to be warm and dry in their own home?

The changes are being phased in over the next seven years and have already started to take effect. Take a look below to see what is set to happen:

April 2016 - Domestic tenants are able to make requests for energy efficiency improvements to be made and any reasonable request cannot be denied.

April 2018 - ALL privately rented properties where NEW tenancies or leases are granted or renewed MUST have an EPC rating of 'E' or above -   this applies to both domestic and non-domestic buildings (exclusions apply).

April 2020 - ALL privately rented DOMESTIC buildings MUST have an EPC with a rating of 'E' of above - meaning even buildings with tenancies which have NOT been renewed for many years (exclusions apply).

April 2023 - ALL privately rented NON-DOMESTIC buildings MUST have an EPC rating of 'E' or above (exclusions apply).

As you might expect, there will be hefty penalties in place for those who fail to comply with the new standards. If your property/ies currently fall within the 'F' or 'G' categories, it would be wise to anticipate and prepare a schedule of works well ahead of time to ensure that they meet the new requirements by the times as dictated above.

There is, of course, the potential to take advantage of the 'Green Deal' in terms of making certain improvements to your property. This means that you may be eligible for certain elements of energy efficiency upgrades in terms of a grant, or so that you don't have to foot the cost of works 'up front'. There is plenty of information about the Green Deal online, so please ensure to look into this option if you feel it may be applicable to you.

With the deadline approaching ever-closer, this could open up opportunities for the well-prepared investor to educate vendors (from whom they are viewing a property which does not meet current standards) and negotiate bigger discounts in order to carry out the necessary changes needing to be made. This may well be a strategy which you already adopt (it is certainly one we have been implementing during our time as landlords), and will add another 'string to your bow' in the negotiation process.

If you need any help with keeping up to date with landlord legislation and changes which are coming about, please feel free to drop me a line via [email protected] and I will make sure you are added to my 'Weekly Property Wisdom' emails. :-)

Until next time, here's to happy, warm and dry homes!


Hazel de Kloe

Property Investor | Property Mentor | Speaker | Author

The contents of this article are for educational purposes only and we make no recommendation of any particular property purchase. The price of property can decrease as well as increase and you make any investments in property at your own risk. 

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