What Is MEES?

What is MEES?

The minimum energy efficiency standard (MEES) was introduced in March 2015 by the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015. The MEES Regulations originate from the Energy Act 2011 which contained the previous coalition government’s package of energy efficiency policies including the Green Deal.

How does it impact the residential property that I let out?

Under the current legislation, landlords of residential properties (those with an EPC rating of F or G) are required to upgrade the energy efficiency of their properties only if this can be done at no cost to the landlord. The legislation envisaged that this would be achieved by way of a Green Deal finance plan, the Energy Company Obligation (ECO) or a local authority grant. However, the Green Deal – an innovative funding solution under which a landlord borrows money to undertake specified energy efficiency improvement works – was effectively withdrawn in 2015 as a result of the Treasury’s refusal to continue to fund it. There are currently some Green Deal providers but not sufficient to carry out all the works that are expected to be required. The Energy Company Obligation is currently not scheduled to continue beyond 2022.

However, the government is keen that residential landlords are put under some obligation to carry out works and it has now issued a consultation which suggests that landlords of sub-standard residential properties should contribute towards the cost of improving their energy efficiency, but with a cap on their contribution of £2,500 per property.

 

How will MEES impact me as a landlord? 

The new MEES legislation will remove the ‘no cost to the landlord’ principle and replace it with a £2,500 (inc VAT) cap per property which can come from grant funding, pay as you save finance or from the landlord’s own money.

Properties that still have F or G rated EPCs after the landlord has spent £2,500 on it will have to register an exemption but will continue to be legal to let. Crucially, at the end of the 5-year exemption, landlords would have to look to improve their property and the cap would again apply.

Only money spent since 1 October 2017 will count towards the cost cap – many organisations that campaign to save landlords money are lobbying on this issue. Lisa is looking to push it back as far as we can – why should a Landlord that has already spent money improving the efficiency of a property that is difficult to improve be disadvantaged by a government imposed date? They were the landlords trying to do the right thing!

 

Where has the £2,500 come from?

The Government estimates that such an approach should enable approximately 30% of sub-standard properties to be improved to E, which equates to approximately 85,000 properties. It also says that the average cost of works to bring a property up to an E rating is £865. If a cap of £5,000 per property were chosen, this would mean that 42% of substandard properties would be improved to E, equating to 120,000 properties. On the other hand, if a cap of £1,000 was chosen, this would mean that only 14% of properties would be improved, amounting to 40,000 properties.

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