What This Requirement Covers
The Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 set Minimum Energy Efficiency Standards (MEES) that apply to privately rented domestic and non-domestic properties. Landlords must not let a property that falls below the minimum EPC rating unless a valid exemption is registered.
Key Requirements
Current Requirements
- Domestic properties: Minimum EPC rating of E since April 2018 (applies to new tenancies) and since April 2020 (applies to all existing tenancies)
- Non-domestic properties: Minimum EPC rating of E since April 2023
- A property below the minimum rating cannot be let to a new tenant or continue to be let to an existing tenant (unless an exemption applies)
Penalties for Non-Compliance
- Domestic: Civil penalties of up to GBP 5,000 per property
- Non-domestic: Civil penalties based on the rateable value, up to a maximum of GBP 150,000
Exemptions
Exemptions may be registered on the PRS Exemptions Register
- All improvements made: All relevant energy improvements have been made and the property still does not reach the minimum rating
- Cost cap: The cost of recommended improvements exceeds the applicable spending cap (GBP 3,500 including VAT for domestic properties)
- Consent: Required consent (planning, freeholder, etc.) has been refused
- Devaluation: Improvements would reduce the property value by more than 5%
- Wall insulation: Wall insulation recommended by the EPC assessor has been assessed as not appropriate
Future Changes
- The Government consulted on raising the minimum standard to C by 2028 (domestic) and B by 2030 (non-domestic), but these proposals were paused in 2023
- Landlords should monitor Government announcements for future changes to the MEES thresholds
Practical Compliance Tips
- Check the EPC rating of all rental properties in your portfolio against the MEES requirements
- If any properties are rated F or G, commission an energy assessment to identify the most cost-effective improvements
- Register any valid exemptions on the PRS Exemptions Register; an unregistered exemption is not valid
- Plan improvement works when properties are vacant between tenancies to minimise disruption
- Keep receipts and evidence of improvement works and costs in case of enforcement
- Review the EPC when it expires (every 10 years); the property's rating may change due to updated methodology
- Consider improving properties to Band C now, in anticipation of future MEES increases