Pictured: Stephen Richards
New Government legislation on the energy efficiency of buildings
will have a major effect on the private rented sector and has the
potential to bring down residential property values, according to
experts at national commercial property consultancy Lambert Smith
Hampton (LSH).
In the worst case scenario, private landlords could be left with
unlettable premises under the terms of the Energy Act 2011.
The Act, which has received Royal Assent, will make it unlawful
for private landlords to rent out an apartment or house with F and
G rated Energy Performance Certificates after April, 2018. This
means landlords need to act now to avoid significant improvement
costs in the future. The government estimates that nearly 700,000
rented homes in the UK will need to be improved.
In addition, from April 2016, private residential landlords will
be unable to refuse a tenant's reasonable request for consent to
energy efficient improvements when a finance package - the soon to
be introduced "Green Deal" for example - is available. The Green
Deal will ensure that the cost of improvements is spread across
energy bills and not payable by the consumer up front.
LSH Director Stephen Richards said the degree of risk attached
to F and G rated properties was high, and would get higher as the
2018 deadline approached.
"Landlords need to be responding to this legislation now, and be
identifying which of their properties are at risk of falling foul
of the law and putting a plan in place to improve the future
environmental performance of their properties," he said.
He added, "Although 2018 may seem a long way off, the potential
effect on property values, and therefore rents that can secured,
will fall a long time before the deadline. Statutory compliance
costs could be very high if work isn't done to improve
environmental performance. Far better to identify the reasons for
poor performance and carry out efficiency improvements earlier
rather than later, or during routine maintenance..
"It's also important that landlords of D and E rated buildings
don't get complacent. Falling values will affect them too over time
as regulations get more stringent. Landlords should act now to
secure the highest possible energy rating."
For more information about Lambert Smith Hampton, please visit
their website here: www.lsh.co.uk