Climate change is rightly much in the news at the moment, with the First Minister declaring a climate emergency and various local authorities across the country following suit. There is no one solution to the problems we face, but we are all going to have to live with the consequences if we do not act quickly.
As the policy environment shifts in this direction, Scottish landlords need to be fully prepared for what is to come, to ensure that the new rules do not prevent them from providing high-quality homes.
Prime amongst these is the Scottish Government’s ambitious Energy Efficient Scotland programme to ensure that homes, businesses and public buildings are warmer, greener and more efficient. From 1 April 2020, landlords entering into a new tenancy agreement must ensure the property meets the new Energy Performance Certificate (EPC) band E. By 31 March 2025 all rental properties must have an EPC rating of D, except for a limited number of exemptions. For some homes this is going to be a challenge, so it is critical that landlords don’t wait until the last minute to make upgrades.
Non-compliance with the new rules is more than simply the competitive disadvantage in the marketplace, as non-compliant landlords could face a fine of up to £5,000. The sector must begin planning now for the future or our businesses may be at risk.
There is help available now for landlords that we should all try to take advantage of. For example, for properties currently sitting at F and G ratings, landlords can request a visit from an EPC assessor to produce a report on the property. The personalised analysis of the property will outline recommended measures, the cost of any work and information on different support that might be available.
The average UK property has an EPC band of D so some may already be up to standard or require only small tweaks. However, for older properties in cities such as Edinburgh, Glasgow or Aberdeen that need more substantial investment, landlords can apply for funds such as a Home Energy Scotland Loan, HEEPS Equity Loan or a Resource Efficient Scotland SME Loan. There are also incentives for renewable technology for electricity generation. At the Scottish Association of Landlords (SAL), we have more information on these programmes and how to apply, so we would urge any private landlord to get in touch to see how we can help. Further minimum energy efficiency standards are likely to be rolled out over the next ten years to ensure private rented properties all have an EPC of band C by 2030.
Overall, SAL welcomes the move towards increased environmental performance. Improving energy efficiency doesn’t just help the environment but assists landlords and tenants alike. Improvements may help reduce damage to properties such as that done by damp. However, policymakers must ensure that the drive for better environmental standards does not compromise the critical role of the private rented sector in providing homes across Scotland. Equally, it is not yet clear what funding might be available in the future, although the draft regulations currently state landlords will only be required to take action where the cost of the work can be financed by a grant or loan.
The draft guidelines have been laid before parliament so we can expect to see a further update either late this year or the beginning of 2020 with finalised proposals. SAL is actively working on this issue so if you are not already a member, please get in touch to learn how we can help you understand how the rules might affect you and what funding is available for any upgrades.
Only by being aware of these changes and actively engaging with them can we maintain the reputation of the private rented sector in Scotland and ensure our role in housing provision across the country is secure.
John Blackwood, chief executive, Scottish Association of Landlords