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Making energy efficiency improvements in flats

If you live in a flat there are a number of different people or companies who might need to be involved in any changes you want to make to your home. The following guidance is for owners, renters, freeholders and management committee members in blocks of flats who are thinking about energy efficiency improvements. 

Blocks of flats in England and Wales are owned by a freeholder who has overall responsibility for the building and communal areas, while individual private flats are owned by leaseholders. In many cases, blocks of flats are managed by a property management company or a residents' management committee on behalf of the freeholder.

The key principle

modern block of flats

If you are thinking about making energy improvements in a flat or across a block of flats, carefully read the lease for each flat concerned. Leases make up the local law for your block of flats and can vary between flats in the same building. Leases determine what parts of the building belong to individual flats and what to the freeholder, and what permission flat owners need to get from freeholders before they make different improvements. 

What energy improvements can you make? 

  • Social housing tenant

If you're a social housing tenant you can usually install energy efficient light bulbs (but check your tenancy agreement) and obviously upgrade any of your own home appliances, such as your television, to a more efficient model.

If you want fixed improvements, such as insulation, windows, solar panels or a more efficient heating system, you will have to ask your social housing provider. Try and get other residents in your building on board and engage with the housing provider's sustainability and asset management teams.

  • Private tenant

If you're a private renter you can usually make changes to the light bulbs (but check your tenancy agreement) and obviously upgrade any of your own appliances to a more efficient model.

Generally, if you want fixed improvements, such as insulationwindowssolar panels or a more efficient heating system, you will have to ask your landlord, and bear in mind they may need to seek permission from the freeholder, if they do not own the freehold themselves. However, if you are willing to pay for energy efficiency improvements yourself, you do have some additional rights under the 2011 Energy Act - please see box below.

  • Flat owner

If you own a flat, either as an owner occupier or private landlord, your ability to make different improvements inside your flat will depend on the terms of your lease. You must check the terms: leases can vary even within the same building. The lease will determine what belongs to you, e.g. you might own the glass inside your windows but not the window frame, and determine whether, for example, you can make structural improvements inside your flat. Usually there is a need to seek your freeholder's consent for most improvements inside the flat and you may have to pay an administrative fee for the freeholder to give their consent.

If you are a private landlord who owns a flat you have additional rights to make energy efficiency improvements under the terms of the 2011 Energy Act - please see box below. 

The Tenants Energy Efficiency Improvement Regulations make it easier for owners and tenants of private rented flats to make energy efficiency improvements. Neither landlords nor freeholders can unreasonably withhold consent to energy efficiency improvements inside flats where these are allowable under leases. If you are a tenant and are willing to pay for energy improvements such as more efficient storage heaters, your landlord may have to let you do so, and the freeholder similarly may have to agree to the works proceeding. However, tenants don't normally pay for home improvements in the UK, and a more normal situation is where the landlord of a private rented flat wants to make and pay for improvements: in these cases the Tenants Energy Efficiency Improvement Regulations can help the landlord in their negotiations with the freeholder.
  • Management committees, building management companies and freeholders

If you are involved in managing a block of flats on behalf of the freeholder (for example as a residents’ management committee) you are in a great position to make energy efficiency upgrades. You might think, for example, about changing windows or installing wall insulation and loft insulation across the block of flats. You will need to review the leases for all the flats in the building. Unfortunately, leases can pose difficulties: if leases do not allow you to share the costs of improvements (often leases allow for the costs of building repairs and maintenance to be shared but not improvements), you will, at least, need the agreement of all the flat owners as to how you are going to allocate costs and you may need to reach agreement to revise lease terms. In either case you will need to consult a solicitor.

This is a complicated area and you are strongly recommended to carefully consult the regulations and to seek legal advice. In strict legal terms a freeholder is a long term landlord, and a leaseholder is a long term tenant. In this guidance, for the avoidance of doubt, we use the term "landlord" to mean a person or organisation renting out a flat on a short term tenancy, and "tenant" to mean a short term tenant.

Minimum Energy Efficiency Standard regulations in England and Wales

woman on laptop in a flat

Minimum Energy Efficiency Standard (MEES) regulations require landlords of the most energy inefficient homes, banded F and G on an Energy Performance Certificate, to make improvements to heating and insulation to raise these properties up to EPC band E. The private rented sector has the largest proportion of energy inefficient homes and nearly half of households living in them are in fuel poverty.

The regulations requiring landlords of F and G banded homes to make improvements have been in place since 2018 if grant money was available. 

From April 2019, landlords of cold homes in England and Wales have to pay up to £3,500 (inc. VAT) to improve the insulation and/ or heating of property before they can rent it out to new tenants or issue a renewal of an existing tenancy agreement. 

From 1st April 2020, landlords will have to make changes to F and G banded homes even where tenants are staying in place.

You can find more guidance around the new regulations on the government website.  

What do the MEES regulations mean for tenants?

Landlords must disclose the energy rating of the property when they advertise it, and they must show you the full Energy Performance Certificate at a viewing.  If the certificate isn’t offered at this stage, you should ask the estate agent to supply it. You should check the EPC rating before agreeing to rent a home and be cautious if a property is F or G banded.

Ask your landlord or managing agent to provide the Energy Performance Certificate, if you do not currently have it.

If you are in an F or G banded home, speak to your landlord about what steps they will take to ensure it is improved by April 2020.

You can contact your Council to help if your landlord doesn't take any action to improve your home. The council can order landlords to make energy saving improvements. But before going down this road, you should discuss what communication the council will have with the landlord, as it is still sometimes possible for landlords to evict tenants in this situation.

What do the MEES regulations mean for landlords?

Ensure that all potential tenants see a full copy of the Energy Performance Certificate before they agree to rent a property.  This is a legal requirement and you can be fined for not doing this.

The EPC is produced by an expert home energy assessor and is valid for ten years, so you don't need to get a new EPC each time you let the property. However, it's worth getting a new EPC certificate if you’ve made significant energy efficiency improvements (a new boiler, insulation, double glazing etc) as a home with a higher EPC rating will be more attractive to tenants. 

If you have made energy efficiency improvements on a previously F or G rated property, you should get a new certificate, so that you are not affected by the MEES regulations.

Under the MEES regulations, you will need to invest up to £3,500 inc VAT to get an F or G rated property up to the required standard before re-letting it. Examples of improvement measures include installing floor insulation, low energy lighting, increasing loft insulation, or changing to a more efficient heating systems. The Residential Landlords Association expects the average cost to bring properties up to EPC 'E' will be around £1,200.

Exemptions

Some homes will need more than £3,500 to bring them up to an EPC 'E' standard. In that case, if you can prove you’ve spent £3,500 or more on energy improvements, you can still rent out the property, even with an F or G banding. There are some other grounds for exemption from the MEES requirements, including for new landlords (in their first six months of operation) and where energy efficiency measures will damage the home or its value.

In these case you will needs to register an official exemption.  In most cases the exemption will last for five years. (any F and G banded home listed on the PRS Exemptions Register under the more generous MEES rules in place last year, on the basis of the costs of making improvements, will have to re-register under the new rules by April 2020).

But you don't need to be bound by the £3,500 limit on investment. The government is likely to increase the minimum standard incrementally from E, to D, then C in the future.  Undertaking a single whole house retrofit, tackling insulation, windows and heating system to get a cold property to a D or C standard in one go is likely to be cheaper than a series of upgrades.

We’ve got more advice on improving your property on our website.

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