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Analysis

28th March 2017

Why you need to be targeting the residential and commercial lettings market

Landlords have just a year to improve the energy efficiency of their properties or face massive fines. That means opportunities for installers. John Leary, Sales and Marketing Director, Emplas explains.

MEES or the Minimum Energy Efficiency Standards slipped almost unnoticed into law as one of the final pieces of legislation before parliament was dissolved ahead of the 2015 general election. There was very little discussion, little to no debate and certainly, no headlines.

Now with a year to go before they become law, ‘chickens’ are most definitely ‘coming home to roost for residential [and also commercial landlords]. That’s because under the legislation any residential property rented after 1st April next year [2018] will need to achieve a minimum ‘E’ Energy Performance Certificate (EPC) rating.

It means that landlords have between now and this time next year to bring the thermal efficiency of their properties up to scratch or be banned from agreeing new rentals. Hefty fines for agreeing new rental agreements on properties, which fall short of the minimum standard, after the law comes into force are also in place.

In doing so MEES finally provide the financial incentive to landlords, to improve the energy efficiency of their portfolios and that by default, will generate opportunities for window and door companies.

What’s driving home energy efficiency legislation?

Much of our housing stock was built in the pre-war period and is notoriously ‘leaky’. What’s equally significant is that around 75 per cent of the residential properties that will be occupied in 2050, already exist.

This makes improving the energy efficiency of our existing housing stock key if the Government is to reach its own targets to cut UK carbon emissions.

The Carbon Plan, for example states that in order to achieve the UK’s agreed legislative targets, emissions from all buildings must to be ‘close to zero’ by 2050. The implications of this in the longer term would mean that UK buildings will need to reach energy efficiency standards of close to an EPC rating of ‘A’.

With rental properties among some of the least energy efficient, improving their thermal efficiency is a key element of its strategy.

What is an energy performance certificate?

Energy Performance Certificates themselves have now been around for a little while. They were introduced to domestic properties as part of the HIPs pack in 2007, then rolled out to non-domestic properties in 2008. They work more-or-less in the same way as WERs, providing a measure of energy performance running from A to G, only in this case for the energy performance of the property as a whole.

What are requirements for landlords under the Minimum Energy Efficiency Standard 2018?

The changes to MEES, which were made law in March 2015 set the new minimum energy efficiency standard of an ‘E’ EPC rating on all new lease (as well as lease renewals) from 1 April 2018. Those residential landlords that don’t meet this minimum will face a civil penalty of up to £4,000.

From 1 April 2020, the regulations will also apply to all privately rented property in scope of the regulations, including where a lease is already in place and a property is occupied by a tenant. The regulations will also be applied to sublets.

The only exemptions are where any property is let on a tenancy for six months or less and any property let on a tenancy for 99 years or more. There are also exemptions for those properties already excluded from existing Energy Performance Certificate (EPC) obligations, for example Listed buildings.
Other exemptions include where a tenant refuses consent for energy efficiency works or where such works would have a negative impact on capital or rental value.

Opportunities for window and door installers in 2017

The legislation is important in the immediate impact and the potential that it has to ignite the energy efficiency sector this year. 12-months is not a long time to bring your property portfolio up to scratch, so approaching landlords now should pay dividends for installers this year.

Manufacturing one of the UK’s most energy efficient systems, we’re well placed to support customers in accessing this potentially highly lucrative market.

Optima, launched by Profile 22 last year, features a six chamber outer-frame and five chamber sash. This means that the 70mm system achieves U-values as low as 0.8W/m2K and an A++ WER. With 24-44mm beading. Improved sealing with a 10mm cover, a 35 per-cent increase in hardware retention through local thickening, plus a wider colour and foil offer, give the system strong credentials in a retail environment.

How to target landlords

So how do you reach landlords? Well, establishing partnerships with lettings agencies is an obvious first port of call. Lettings agencies will have established relationships with landlords in your area. From their perspective, a partnership with an installer allows them to offer an added-value service to their own client base.

If they’re good they should have built up a decent database and CRM. There are also regional landlord associations nationwide, in addition to the National Landlords Association, which it may be worth approaching.

The other routes are online forums and social channels, including LinkedIn, which lists 152 landlord groups and more than 178,634 UK members with a registered interest in lettings. A little refinement and careful searching gives you your own database!

The other route is to buy a database. There are a number of specialist providers out there but his obvious comes with a price tag.

As an industry we need to be engaging with landlords and property agents between now and 2018 but also far into the future because the legislation is now there as a driver of market growth. It makes energy efficiency a very tangible commercial platform.

We offer our customers dedicated retail and lead generation support. To find out more please don’t hesitate to contact me or a member of the team on 01933 674880 or email info@emplas.co.uk

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