Part 3 – Private Rented Sector
In Part 1 of this document we have set out our intention to bring forward regulations this Autumn that would require landlords in the private rented sector to ensure their properties meet EPC Band E from April 2020, increasing to EPC Band D from April 2022.
Under these regulations, the required works will be capped at £5,000 to reach EPC Band E, and then a further £5,000 to reach EPC Band D. However, it is proposed that the required level of work to achieve EPC Band C is determined by what is technically feasible and cost-effective. Work is underway to further define cost-effective and a definition will be published in due course. Technical feasibility will be determined through an assessment of the property and work, via a Short Life Working Group, is underway to develop this new assessment.
We are now considering extending these standards to EPC Band C, a proposal previously proposed in the Energy Efficient Scotland Route Map. This proposed that all privately rented homes should meet EPC Band C by 2030, where technically feasible and cost-effective
What you told us
Responses to that consultation indicated general agreement that all PRS properties should reach EPC Band C, and that it would be helpful to set a long-term trajectory to reach this band. Some respondents raised concerns regarding the risk of stock being removed from the private rented sector if standards are not aligned with those for the owner occupied sector.
By setting out a long-term trajectory of standards now, landlords can plan improvement works and the investment needed to bring properties up to the required standard
Extending PRS Standards to EPC Band C
It is proposed that the EPC Band C standard will initially apply to properties where there is a change in tenancy after 1 April 2025. A property will meet the standard if it has a valid EPC showing an energy efficiency band C or above. Where the EPC shows a band D or lower, the owner will need to undertake works and lodge an updated EPC showing an energy efficiency rating of band C or above, unless exceptions have been granted by the relevant authority.
Properties failing to meet the minimum requirements would be subject to civil fines. Fines will be set following review of the current system in the early 2020s.
7. What are your views on using change of tenancy as a trigger to require the increased standard?
8. What are your views on using 1 April 2025 as the date to start applying the minimum standard of C when there is a change in tenancy?
9. With regards to providing a useful tool to landlords planning and executing improvement works, what are your views on basing any cap of required works on a definition of cost-effectiveness and technical feasibility?