Landlords now have to obtain energy performance certificates for their properties or face a £200 fine.

October 6th  2008

The list of rules and regulations for landlords is long and growing. The latest initiative, which came into force this week in England and Wales and will apply from February 1 in Scotland, is the introduction of energy performance certificates for the rental sector.

Landlords who fail to obtain a certificate for each property they rent face fines of up to £200 per property and will not be allowed to market their property.

The certificates, which at present are a mandatory element of home information packs provided by those selling their properties to prospective buyers, give the property an energy efficiency ranking on a scale from A to G, with A being the most efficient. The certificates also make recommendations on how to improve energy efficiency, and indicate the potential rating the property would achieve with the improvements.

There is some comfort for landlords with several tenanted properties: they do not have to go through the process of getting the certificate now - they can wait until it is re-let to different tenants, and the certificate lasts for 10 years. Also, where a property is rented out as several bedsits, only one certificate is required, so long as the house has a single heating system.

When proposals to introduce the certificates to the rental sector were first mooted, many lettings agents argued that they would largely be ignored by tenants. They said that tenants are far more interested in the condition of the property and the rent. However, some experts point out that rising energy costs mean that the certificate could, after all, be a factor in a prospective tenant's deliberations. "While last year this may have been brushed aside as unnecessary, the current economic climate is such that it may well have an impact on the tenant's decision-making process,'' says Jane Ingram, head of Savills lettings.

David Whittaker, of Mortgages for Business, a specialist buy-to-let broker, agrees. "EPCs might have been ignored by tenants were it not for the 30 per cent increase in electricity and gas bills that consumers will face this winter,'' he says.

The introduction of the certificates to the rental sector is the latest in a series of new regulations imposed on the buy-to-let sector. Among other new measures have been the highly complex rules governing homes in multiple occupancy as well as the tenancy deposit protection regulations introduced last year.

While many of the new regulations have been controversial, agents believe that few landlords will complain about energy certificates. "Landlords are not complaining about this one as EPCs are relatively cheap,'' notes Ingram.

While few agents expect landlords to rush out and spend thousands of pounds on increasing their property's energy efficiency in order to improve their energy rating, tax breaks are available to help buy-to-let investors who do want to make green improvements to their flats and houses, while local authorities can also offer grants to landlords.

So while the outlay to get a certificate might be an irritation, it could pay to make your rental property greener.