One in 10 rental properties may be unlettable by 2018

A terraced street with a bridge behind

New laws that take effect in April 2018 will make it illegal to let out properties with one of the two lowest energy ratings, F or G. In addition, from 2016, landlords will be unable to refuse tenants’ “reasonable requests” for energy efficiency improvements.

According to the English Housing Survey, in 2011, 11.4% of properties in the private rental sector were rated in the lowest two energy efficiency rating (EER) bands. This is compared to 8.2% of owner-occupied properties and only 3.6% of social homes (2.0% of local authority and 1.6% of housing association lets).

This means that one in ten buy to let properties will be uninhabitable by law unless landlords improve their energy efficiency in the next five years. It is presently unknown whether or not current tenures in F- or G-rated properties will be allowed to conclude or whether the legislation will come into effect on a set date.

This news comes as Energy Performance Certificate (EPC) regulation is being used by Slough Borough Council to penalise landlords for the illegal use of outbuildings as private lets – otherwise known as ‘beds in sheds’.

The council are using thermal imaging aerial photography to help identify where sheds are being lived in. This data will then be cross-checked to see if they have valid EPCs; if not, enforcement options include a daily £200 fine for the landlord.

Where permission is granted for landlords to let out outbuildings as accommodation, the properties must be fire and energy compliant and are eligible for council tax. It is estimated that between 700 and 3,000 ‘beds in sheds’ are illegally occupied in Slough alone.

This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.