Consultation: Privately rented homes and MEES – ‘2025 update’

On 7 February 2025 the government launched a consultation headed ‘Improving the energy performance of privately rented homes: 2025 update’. The detail in the consultation is in line with Labour’s manifesto commitment to ensure that homes in the private rented sector meet increased Minimum Energy Efficiency Standards (MEES) by 2030.

‘2025 update’

The reference to the ‘2025 update’ is acknowledging the Conservative government’s 2020 consultation in this area. The government notes that the proposals in the current consultation ‘seek to build on the proposals from the 2020 consultation whilst taking into account the passage of time and changed context’.

The consultation is also hot on the heels of the December 2024 Energy Performance of Buildings (EPB) consultation and indeed the two are closely linked, with the government’s preferred approach in this consultation drawing on its proposals for changes to the EPC regime.

The consultation also references the wider policy reforms taking place such as the Renters’ Rights Bill and the extension of the Decent Homes Standard to the private rented sector. The government has also launched a consultation on a new fuel poverty strategy.

What are the government’s proposals?

Some of the key government proposals in the consultation are set out below:

• To set higher MEES against new metrics planned to be introduced to EPCs following EPC reform in 2026: The indication in the consultation is this would be equivalent to achieving an EPC C under the current regime. The government’s preferred approach is to have a requirement to meet a primary standard set against the fabric performance metric and then a secondary standard set against either the smart readiness metric or the heating system metric (details of these metrics are set out in the December 2024 EPC consultation). The proposal is that it would be at the landlord’s discretion as to which secondary metric the property meets. The fabric performance metric would require a focus on measures such as loft insulation and double glazing (with exemptions where such measures are not suitable for a particular building). This proposal would also see the rating move away from the current Energy Efficiency Rating (EER) which grades buildings on the basis of running cost.

  Views are also sought on alternative proposals which are:

  • a requirement to meet a standard set against dual metrics of equal weighting. The standard would be set against dual metrics including two of the following: fabric performance, heating system and smart readiness.
  • a requirement to meet an overarching standard set against all three metrics of fabric performance, heating system, and smart readiness, either through improvements across all standards or through landlords concentrating improvements against one or two standards

• That the new MEES requirement would apply to new tenancies from 2028 and all tenancies from 2030.

• That landlords would be required to invest up to a maximum of £15,000 inclusive of VAT per property on improvements to meet the standard (the ‘cost cap’), after which they could register a 10-year exemption to continue to let the property if it does not reach the standard: The consultation notes that the government estimates on average ‘properties will require between £6,100 and £6,800 worth of investment to meet the standard under the preferred metric approach’.

  The government does not propose that the cost cap should increase in line with inflation. There is also a proposal that spend towards the cost cap would be counted from the date of secondary legislation being laid in 2026 and the consultation notes that the government would ‘publish guidance to help landlords understand how to comply and what improvements would be counted towards the cost cap’.

  The government appears to be seeking to balance the increase in the cost cap (which is currently £3,500 inclusive of VAT) with the proposed extension to the exemption period (which is currently 5 years).

• A transition from the current EPC standard: The consultation highlights that If new metrics for EPCs are introduced, and there is a phased implementation then there will be a period from 2028 to 2030 where some properties will be subject to the metrics under the new standard, whilst others remain subject to the existing EPC E standard set against the EER, depending on whether there has been a new tenancy for the property. However, if the proposal in the December 2024 consultation is taken forward that rented properties are required to have an EPC in place at all times – some old EPCs with an E rating could expire and be replaced with a new EPC (even though there is a continuing tenancy). The government is therefore proposing that as a transition measure landlords may be able to demonstrate their properties are compliant with the existing standard of EPC E using their past EPC.

• Privately rented homes that achieve a score of EPC C against existing EPCs, before the new EPC methodology is introduced, would be considered compliant with the higher MEES until their existing EPC expires. However, the government is also proposing that for those properties that remain below EPC C following the EPC reforms, landlords ‘would be required to commission a new EPC before taking action to comply with the higher standard. This is to ensure they are installing the correct measures as recommended by their new EPC, to meet the higher standard set against new metrics, with the cost of this EPC included within the proposed £15,000 cost cap’. Views are sought on whether a post improvement EPC should then be commissioned.

Through the consultation the government is also seeking views on:

• Whether to develop an affordability exemption that lowers the cost cap to £10,000 for some properties and how this could be implemented. The complexities and challenges of introducing this exemption are explored in the consultation.
• Whether to increase the scope of the PRS regulations to include short-term lets to ensure a consistent standard between privately rented homes and short-term lets. The government also wishes to discourage landlords switching to short term lets.
• What regulatory measures could be used to drive the installation of smart meters in privately rented homes.
• The existing exemptions regime for the PRS Regulations and whether there are other instances in which exemptions should apply.

The consultation also provides feedback on certain aspects of the 2020 consultation. Some of the responses highlighted by the government include the following ‘preferred positions’:

• that the maximum penalty for non-compliance with private rented sector MEES should be set at £30,000 in relation to the same breach and for the same property
• there is no proposal to introduce a PRS MEES-specific compliance and enforcement database – instead this will be covered by the wider PRS Database which will be introduced via the Renters’ Rights Bill.
• a simplification of the temporary exemption due to recently becoming a landlord.

Next steps

The consultation closes on 2 May 2025.

The government notes that once the consultation has closed it will ‘review the responses alongside the feedback to the 2020 consultation and publish a government response’. However, due to the relationship between this 2025 consultation and the proposed changes to EPCs and the development of the Home Energy Model (HEM) which are planned for 2026, the government notes that this response will be a set of interim policy decisions pending the conclusion of EPC reforms and HEM development. Following these measures being finalised there will then be the final policy decisions for higher MEES for the private rented sector together with updated legislation and guidance. However, the timeframe set out in the consultation still anticipates secondary legislation and guidance in 2026.