On 20 September 2023 Rishi Sunak announced that the Government would scrap proposed improvements to minimum energy efficiency standards (MEES). Since that announcement, it has been confirmed that this will apply to the proposed change (a minimum Energy Performance Certificate rating of C from 2025 for new tenancies and 2028 for existing tenancies) for domestic properties only. The position in respect of non-domestic properties remains unclear.
This article focuses on the latest updates to be aware of when considering MEES. The two most recent of which are:
1) The Energy Act 2023
2) The Government's response to the Climate Change Committee's Annual Report.
Energy Act 2023
The Energy Act 2023 received Royal Assent on 26 October 2023. The scope of the Act is wide ranging and highlighted here are only those parts relating to energy efficiency standards.
What has changed?
The Act enables future legislative changes by empowering the government to implement secondary legislation over a wide range of energy related topics – Part 10 of the Act is focused on energy performance of premises. There are therefore no immediate amendments or additions made to the current energy efficiency standards for properties. Though, as and when the government do decide to act, this legislation could be relied upon to facilitate such a change.
The relevant provisions of the Act found in Part 10:
- Section 250 which allows the Secretary of State to make regulations for the purposes of existing premises:
'(a) enabling or requiring the energy usage or energy efficiency of premises to be assessed, certified and publicised
(b) enabling or requiring possible improvements in the energy usage or energy efficiency of premises to be identified and recommended
(c) restricting or prohibiting the marketing and disposal of premises on the basis of whether their energy usage or energy efficiency has been assessed, certified or publicised.'
The explanatory notes to the Act confirm that such powers are intended to permit government to amend, revoke or replace existing energy performance standards.
- Section 251 enables similar regulations to those envisaged in respect of existing premises to be made for new premises. New premises are those which are being constructed or adapted, or which it is proposed to construct or adapt.
It remains to be seen what changes the government will make.
Response to the Climate Change Committee's Annual Report
The government's response to the Climate Change Committee's Annual Report may be considered a more insightful update to their current position.
Published on 26 October 2023, the Department for Energy Security and Net Zero have stated as follows:
'We have reviewed the responses to our consultation on minimum energy efficiency standards in the non-domestic private rented sector and are working hard to review the policy design to ensure it remains fair and appropriate for landlords and tenants. We plan to publish this in due course. The proposed timelines within the original consultation will require updating to allow sufficient lead in time for landlords and the supply chain.'
The comments made do not suggest that the government will scrap the proposed tightening of MEES for non-domestic premises. The likelihood seems to be that the original proposed deadlines for increasing MEES requirements in non-domestic property (a minimum Energy Performance Certificate rating of C by 2027 and B by 2030) are to be eased but not scrapped. The publication of their plan with further detail is awaited.
Although, with political uncertainty ahead, it could well mean that the position changes once again later this year.
Our expert Real Estate team are keeping abreast of the ever changing landscape that is unfolding in this area. Please do get in touch if you are unsure of your current duties as a property owner or tenant and require legal advice.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.