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Approved: ‘groundbreaking’ rules to ban rental of inefficient buildings

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The government has confirmed it will become illegal to rent out energy inefficient buildings from April 2018

Under the new rules, landlords will be forced to install energy saving measures in buildings which fall into the two worst energy efficiency ratings - Energy Performance Certificate (EPC) Bands F and G - before they can take on new tenants.

The new law, which will affect both residential and non-domestic buildings, was welcomed by the UK Green Building Council (UK-GBC), which said it was the ‘most significant piece of legislation in a generation’.

John Alker, acting CEO of the UK-GBC, said: ‘This could be the single most significant piece of legislation to affect our existing building stock in a generation, affecting a huge swathe of rented properties. The government deserves huge credit for sticking to its guns.

Government deserves huge credit for sticking to its guns

‘Some will undoubtedly cry ‘red tape’, but good landlords and forward-thinking property companies have nothing to fear. This could provide the impetus needed to upgrade our worst-performing, most energy-hungry rented properties and help to kick-start a multi-million pound market in energy efficiency products and services in the UK.’

According to research from WSP the new legislation could mean 35 per cent of the UK’s commercial buildings become unlettable.

The consultancy has urged landlords to assess their stock before the regulation comes into play and it estimated that the penalties for non-compliance could cost as much as £150,000 per property.

Simon Clouston head of sustainability and energy at WSP, commented: ‘It’s been tricky in the past to achieve substantial energy efficiency improvements to the existing non-domestic building stock because it hasn’t been clear where responsibility lies – the landlord or the tenant. These regulations stand to make a groundbreaking impact to the status quo. Whatever the reactions to the regulations, it will be hard for property owners to ignore the potential penalties for non-compliance - which are both financial and reputational through the government’s publication of non-compliance.’

Further comments

Ian Fletcher, director of Real Estate at the British Property Federation
‘Since Royal Assent on the Energy Bill 2011 the property industry has been working constructively with the government on what form the regulations will take, and this announcement is another welcome step on the road to giving the industry certainty on the detail and method of introduction of this policy.’

Richard Lambert, CEO of the National Landlords Association
‘The government has struck a delicate balance between making clear what is expected and ensuring that there is a realistic prospect of landlords being able to comply.

‘Setting the standard at a sensible rather than aspirational level, allowing time to achieve it and granting exemptions if the necessary improvements cannot be funded through the Green Deal or other government subsidies means that these new regulations will not impose an unreasonable burden. Indeed, where a landlord is in a position to undertake improvements, there will be no good reason not to.’

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