The Energy Efficiency (Private Rented Property) (England & Wales) Regulations and the Energy Efficiency (Domestic Private Rented Property) Order 2015, will come into effect next year and, from 1 April 2018, will make it illegal for a landlord to grant new leases or lease renewals, subject to exemptions, of properties that have an energy efficiency rating which is lower than band E. The Regulations will affect existing residential leases from April 2020 and existing non-residential leases from 1 April 2023.

It is estimated that 18% of existing building stock does not have an EPC rating of E or better. Failure to comply will not affect the validity of the lease but the landlord will be liable to incur heavy financial penalties.

Long residential leases are outside the scope of the Regulations but they will apply to assured shorthold tenancies, Rent Act tenancies and some agricultural tenancies.

For commercial property, leases of between 6 months and 99 years are caught. Shorter commercial leases are caught if they are renewals or contain renewal rights.