1. You might be eligible for an exemption
If your EPC is below an E but you still want to let the property, you might be able to get an exemption from MEES. This is going to be an avenue that a lot of landlords decide to pursue, given that upgrades can be expensive, however it’s not nearly as simple as you might hope. To break it down into simple English, for domestic properties you can get an exemption if: you have made all relevant improvements, or you cannot get funding, or you are restricted by planning permissions, or your tenants object to the work being done, or the property value would suffer, or you’ve unexpectedly and suddenly become a landlord. For more details on what the exemption process entails, check out this article.
2. Landlords have no responsibility to spend any money
As of its introduction on the 1st of April 2018, no landlord is obligated to spend a penny of their own money to improve the energy efficiency of a property. A lot of people have misunderstood this point – that’s not their fault, it’s not been made at all clear by the legislation of the authorities. The fact is that unless you can get funding for the improvements, you will not have to make them and can instead go on the exemption register.
3. It’s much easier to get an exemption on an empty property
The vast majority of MEES exemptions are expected to come from landlords that cannot get funding to make improvements on their properties. To qualify for this, you need proof that neither the Energy Company Obligation (ECO) grants or funding under the Green Deal are available to you.
If the property is unoccupied, then ECO is ipso facto not an option. Similarly, a Green Deal assessment of an empty property is an almost laughably simple exercise in confirming that the building has no residence and therefore does not qualify. If your end goal is simply to get an exemption, then get the paperwork done while the place is empty.
Having said that, if you have tenants currently occupying the place but are planning to wait until the end of the lease to carry out the assessments in order to expedite the exemption register process, you may want to consider that getting funding for improvements when you can get it is always a good idea! Especially given point 5…
4. Beware the Green Deal funding
The Green Deal has become something of a dirty word in many corners of the energy industry. The failures of the original Green Deal and privatisation of this most recent iteration have somewhat besmirched the name of what is, in effect, a service for providing loans to install energy saving measures. Although many people will claim that the Green Deal is ‘dead’, the introduction of MEES is about to see it return in a big way. Fill out the contact form at the bottom of the page if you’re interested in getting a Green Deal assessment done on your property.
So why should you beware? The newest version of the Green Deal has yet to set interest rates. That means that a Green Deal loan has a huge question mark over it with regards to what the eventual repayable total will be. That may seem completely absurd, but it’s happening. People are getting loans with no idea of the interest rates. Be aware of this.
5. A minimum spend will be introduced very soon
Despite the above few points, if you plan to get an exemption on the grounds of no available funding then you’d best act quickly. As of the 1st of April 2019, our second point becomes invalid. A maximum expenditure of £2,500 per year will be required to make improvements towards the EPC every year until the minimum standard (E or above) is reached. This legislation will be hitting parliament this summer, but make no mistake, it is happening. What’s unclear is exactly how it will fit in with the current rules, ie, if you get a 5 year exemption due to lack of funding now would it still stand after this obligatory investment is brought in? We’ll have to wait and see.
If you have anything done to improve the efficiency of your house this year, ensure you save all the paperwork as, come next year, you can count it toward this required spend.
6. The exemption register is currently a complete mess
Look. To say that elements of the MEES were underprepared would be painfully underselling the truth. Despite years of build up to this legislation, it appears that nobody was actually ready. Nowhere is this more evident than with the exemption register.
Ideally, the exemption register would be set up like the EPC register. Something public, verifiable, and clear. In reality, it has yet to be set up properly. At the moment, lodging and requesting information on exemptions is being done entirely through time consuming and bureaucratic email chains.
UPDATE: Since the time of writing, the exemption register has now gone live, albeit on a beta system. You can access it here.
7. There are plans to dramatically raise the minimum EPC rating… very soon
Long term, the plan is that the MEES will be reviewed every 5 years. The first review, however, is scheduled for 2020 and it’s going to be a big one. There are plans to raise the minimum EPC of rented properties to a D or above by 2020.
That’s a massively tall order and is bound to come up against significant pushback. It also has huge implications for the energy efficiency improvements that landlords are currently carrying out. If the minimum energy efficiency standard is going to be as high as a D in as little in as a couple of years, many would opt to invest larger amounts in more dramatic upgrades.
8. Buying a property with an exemption issued? You’ll need to apply for the exemption again
If you’re looking into investing into a property to let out but are worried about the potential costs of bringing it up to spec, it might seem like a smart idea to go for one that already has an exemption. Unfortunately for you, this wouldn’t help. The exemption is tied to the property owner as well as the property itself, so when sold the exemption must be applied for again.