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How could MEES affect rural properties?

Posted on 2017-06-29

How could MEES affect rural properties?

In recent years there have been a number of steps taken by the Government to ensure homes are more energy efficient. The latest of these, which applies to the Private Rented Sector (PRS) and is set to be introduced next year, is the Minimum Energy Efficient Standards (or MEES).

As of April 2018, new legislation will be brought in to make it illegal to let a property that has an Energy Performance Certificate (EPC) rating lower than E- to new tenants. By April 2020 this will apply to existing tenancies as well.

This is causing particular concern to the CLA, a body representing 30,000 rural landlords, which says the legislation is unenforceable in its current form. The membership organisation says the Government is running out of time to make ‘crucial amendments’ to MEES that would make it easier for rural landlords to meet the new requirements.

No more Green Deal

The CLA, which has a membership that provides more than 40% of all privately rented homes in rural areas, points to the absence of the Green Deal – which was scrapped in 2015 – as a reason why rural landlords will struggle to meet the new standards. The new standards have been drafted as if the Green Deal still exists, when in fact it was shelved nearly two years ago, much to the dismay and disappointment of many in the housing industry.

The Green Deal was a scheme which offered cashbacks and incentives to landlords and owner occupiers to encourage them to improve the energy efficiency of their homes. It enabled landlords to make their properties more energy efficient without encountering any upfront costs, but without such funding getting a property up to an EPC rating of E- has proved much more problematic.

Despite repeated calls from the industry to revive the Green Deal and revise the MEES regulations, the CLA says the Government hasn’t done enough to reassure and help landlords.

According to Tim Breitmeyer, deputy president of the CLA, there have also been mistakes and errors made when it comes to classifying the energy performance rating of particular buildings.

The CLA believes that a third of the homes which will be impacted by the legislation have been given lower EPC ratings than they actually warrant. It says this is due to errors in the way the Government assesses the energy efficiency of traditional solid wall buildings.

Even though the Government has recently consulted on these errors, there are concerns that they won’t be rectified before the April 2018 deadline hits. 

“We support the principles behind the MEES regulations but there are so many errors, delays and uncertainties that it is almost impossible to advise anyone on how to be proactive and ensure compliance,” Breitmeyer said back in May.  

“Without the framework in place it is unjustifiable to ask landlords to act on the regulations when so much remains unclear.”

Will any buildings be exempt from MEES?

It also remains unclear whether listed and conservation properties will be subject to the new regulations, with suggestions that they should be exempt. As of now, the Government hasn’t confirmed whether or not certain homes will be exempted. 

Working out for sure if a building or tenancy is subject to MEES is not an easy or straightforward task, with a lack of clarity over which homes are eligible and which aren’t. Certain listed buildings, temporary properties and holiday lets do not have to meet the new regulations, neither do tenancies of over 99 years or tenancies of less than six months (with no right of renewal).

A landlord can also register an exemption if – for a number of reasons - they believe their property shouldn’t have to meet the new standards.

It is, though, a bit confusing and complicated, with uncertainty abounding over who exactly is – or could be – exempt from the incoming regulations.

Why are MEES a concern for landlords with rural properties?

Bringing homes up to the required energy efficient standard is more difficult for rural properties because they tend to be much older and built using more traditional means.

In some cases, rural homes may have been standing there for centuries and centuries. By contrast, new build properties are built with energy efficient standards in mind, which means the chances of a new build home having an EPC rating of F- or G- is much lower.

In the countryside, it’s much harder to keep homes warm – with bigger, draughtier properties and greater exposure to harsher weather. Ensuring that such homes are energy efficient – as well as keeping people warm – is much harder to achieve and considerably more costly, which is why so many were disappointed to see the Green Deal fund scrapped.

Efficiency upgrades could damage rural properties

There are also concerns that measures needed to improve the energy efficiency of rural homes – in their current form – could be damaging to the structure and character of these buildings. Without urgent reform, the CLA insists, thousands of landlords could be carrying out ‘retrofit measures’ that are either inappropriate or outright harmful to their homes.

What’s more, thousands of rural homes across England and Wales could soon become illegal to let unless urgent action is undertaken. At a time when the number of renters is soaring, the need for more rental properties, both rural and urban, speaks for itself.

Tenants in rural properties also tend to stay put for the long-term, with many rural renters living in properties for five years or more or even ten years or more. If these homes are suddenly illegal to let, what happens to these tenants?

Trade body criticises EPC calculations and makes suggestions

The method by which the Energy Performance Certificate ratings are calculated – the Standard Assessment Procedure (SAP) - has also come in for criticism from the CLA. It says there is discrimination against rural properties which use a different type of fuel and have been constructed in a traditional way.

With the April 2018 deadline fast approaching, and the threat of thousands of rural rental properties being put out of use or damaged by unsuitable improvements works, the CLA has set out some recommendations to both solve the issues and raise awareness.

This includes reviewing the EPC to ensure traditional properties are not damaged, basing the EPC calculations on energy use rather than fuel price to ensure traditional properties aren’t judged unfairly, delaying the implementation of MEES by one year, removing all confusion over the exemption of listed buildings and reinstating tax reliefs for energy efficient investments.

Should MEES really treat all properties in the same way?

According to estimations made by the Government, around 330,300 homes in the PRS have an EPC rating of F- or G-, a significant chunk of the marketplace. As things stand, around 45% of all rural properties have EPC ratings that would need to be improved to comply with the new MEES regulations.

The criticism is that traditional homes and modern homes are treated the same, despite being built with very different methods.

Older buildings – and around 40% of homes in villages in England and Wales were constructed before 1919 - were built in a different way to more modern homes. They are made up of solid brick walls and used materials that allowed moisture to move unhindered through walls. Modern homes, by contrast, are designed to do the opposite, with materials such as concrete render used in the construction process to prevent moisture getting into the structure of the home.

When it comes to improving energy efficiency, this difference matters – stopping moisture from escaping a traditional property by covering interior/exterior walls with impermeable insulation can both damage the property and the occupier.

Despite this disparity, and others, the Government doesn’t take this into account when assessing and recommending energy efficiency retrofits to buildings. With 35% of properties in the UK bracketed as historic or traditional buildings, surely different standards need to apply to traditional and modern homes?

With so many rental homes at threat from the MEES changes, a more tailored, pragmatic approach seems best, especially where older properties are concerned. Failing that, more time – or money – needs to be given to landlords with rural properties to help them get their homes up to the required standards. If not, the whole PRS – and rural tenants and landlords in particular – could suffer. 

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