1. New metrics
The Government wants to replace the EER methodology with a new set of metrics, as described in the other EPC consultation exercise which is still ongoing, which is explored here (the "Second Consultation"). One of the main questions that landlords will want to understand is what a C rating looks like under the proposed new metrics.
2. Minimum spend
Another proposal in the Third Consultation is that landlords who have spent at least £15,000 on energy improvements for a unit which still does not meet the minimum EPC rating would be able to register an exemption. The Government wants feedback on whether that cap is the right level, and whether the exemption period (currently set at five years) should be extended to ten years. Landlords will want to know what financial help there will be for them to pay for these works – will the Green Deal be revitalised? If not, how will their interest payments on any works loans be treated?
3. The transition
In terms of transitioning into the new regime, the Government proposes that new tenancies would have to meet the higher standard from 2028 and all tenancies, new and continuing, would be required to meet the higher standard by 2030. They also suggest that landlords should be able to rely on their current EPCs, meaning that properties with an EPC rating of C obtained before 2026 (which is when the Government proposed to change the metrics for EPCs) should be recognised as compliant with the future standard until their EPC expires or is replaced. This question is hard to answer until more is known about the outcome of the Second Consultation, but it will certainly be tempting for landlords to get new EPCs this year if they are already scoring a C or above on the current metrics.
4. Widening the net
The Government is asking for feedback as to whether short-term lets should be brought into the MEES regime, to level the playing field between holiday lets and the PRS. Landlords should also bear in mind that, under the Second Consultation, it is proposed that listed buildings are also brought unambiguously within scope.
5. Likely onwards trajectory
Landlords will want to know if the Government is likely to mandate an EPC level B or A at some point in the future. For business certainty, they will need to understand the long-term MEES requirements in order to plan their finances and also, on a practical level, to decide how best to carry out the necessary works. Landlords of commercial properties are also waiting for clarity as to whether the MEES regime will be updated for their sector.
The Second Consultation closes on 26 February 2025 and the Third Consultation closes on 2 May 2025 – it's important that landlords engage with both.
