From April 1st, 2018 new rules for commercial and residential rented properties require the property to have an energy efficiency rating of E when new tenancy agreements are made. Landlords are calling on the government to provide tax relief on the money they need to spend to improve the energy efficiency of buildings.

The Minimum Energy Efficiency Standards (MEES) regulations require residential and commercial rental properties to have an Energy Performance Certificate(EPC) of

level E or better. At the present, the rules apply only to new tenancies, but by 2020 will affect all rented properties. Landlords that do not upgrade properties can be subject to fines.

Experts who support the government’s initiative to improve energy efficiency, want the new regulations to be strictly enforced. They propose that the government incentivise landlords to upgrade properties to A, B or C ratings.

The Residential Landlords Association (RLA) has called for any money that landlords pay for energy improvements to be tax deductible. If property is old and not well insulated, energy efficiency improvements can be costly.

When providing commercial mortgages for property that has an F and G rating, some lenders are adding conditions to the mortgage offer that require landlords to upgrade the property within a set period, usually three months.

Upgrading energy efficiency can add value to the property. Landlords that improve buildings above the minimum E rating, may find it easier to attract tenants, as energy costs in high rated buildings will be less.