By It is now more than two years since the Government consulted on plans requiring homes in the private rented sector to have an Energy Performance Certificate (EPC) rating of at least a C.
With an update Ben Beadle, Chief Executive of the National Residential Landlords Association (NRLA),in his regular column for Property Notify®, says the Government must now to commit to a revised timeline, along with a package of financial support for landlords.
Plans to introduce new energy efficiency rules have been on around for several years now, with the Government consultation on plans to introduce the minimum C rating closing in January 2021.
Under the plans landlords whose homes do not meet this standard would be unable to rent them out until energy efficiency improvements – up to the value of £10,000 per property – had been made.
The consultation documents suggested the rules would apply to all new tenancies from 2025, and all others from 2028.
It has been clear to us for some time that these deadlines are unachievable and would need to be revised, so I was pleased to hear Housing Secretary Michael Gove suggesting the Government should “relax the pace” of proposed reforms earlier this summer.
This is good news for the sector.
Not because landlords aren’t committed to energy efficiency – energy efficient homes are more economical to run and more attractive to tenants – but due to the vagaries of the original proposals, the initial deadlines and the potentially devastating financial impact on some landlords.
What are the financial implications?
One of the major concerns for us here at the NRLA, aside from the deadlines, is the planned cost cap for improvement works needed to bring a property’s EPC up to the required level, proposed in the consultation document as £10,000 per property.
It is clear this would be completely unaffordable for many, not least in the current economic climate, where many landlords are already considering their future in the sector.
Contrary to reports in the media, the majority of landlords are not ‘fat cats’ profiteering of hard-pressed tenants, with almost 70% basic rate taxpayers who would struggle to pay these bills.
The figure of £10,000 also has a different value dependant on where in the country you and your portfolio are based.
If you have a property in central London and are charging market rent, £10,000 is still a lot of money.
However if you are in somewhere like the North East, where property values and rents are significantly lower, it’s a staggering amount
The plan also fails to recognise that private rented sector contains some of the most difficult homes to retrofit, with recent figures suggesting almost four in 10 properties currently have a rating that falls below the required ‘C’.
High level meetings
I have personally raised the issue in meetings with the Minister for Energy Efficiency, Lord Callanan and Mr Gove, with the Housing Secretary’s latest statement suggesting the message is getting through, telling The Telegraph:
“My own strong view is that we’re asking too much too quickly. We do want to move towards greater energy efficiency, but just at this point, when landlords face so much, I think that we should relax the pace that’s been set for people in the private rented sector, particularly because many of them are currently facing a big capital outlay in order to improve that efficiency.”
I was invited to Mr Gove’s housing statement just a day later, and took the opportunity to quiz him further on this and other issues.
He reiterated his comments in The Telegraph, saying that while there is a ‘specific timetable’ in place, this is something that he believes ‘needs relaxing’.
This is a step in the right direction. But landlords need more support.
What does the NRLA want?
The NRLA is calling instead for the amount that landlords should be expected to contribute to be linked to average market rents in any given area.
Under the NRLA’s proposals this would mean the maximum amount a landlord would need to pay would taper, taking into account different rental values (and by implication, property values) across the country.
Alongside this, we are calling for a package of fiscal measures to support investment. This should include the development of a new tax allowance for landlords who are undertaking works towards reaching Net Zero.
Now is the time for the Government to go back to the drawing board to come up with sensible workable proposals, with the appropriate financial package behind them and a definitive timetable produced to avoid landlords being left in limbo.
More information on the outcome of the consultation is expected from Government by the end of the year and we are keen to work with the Government to develop proposals that are fair and workable for all.
More information
To read more about the NRLA’s proposals on Energy Efficiency click here.
For more information on how to join the association click here.
The NRLA runs a programme of regional meetings and events both online and in person to build landlord communities on the ground and bring about change on a local level.
And some landlord make such little profit on a few mortgaged homes they DIDNT EVEN PAY BASIC RATE TAX
WE ARE A SOCIAL SERVICE HELPING VULNERABLE PEOPLE.
and all we get is hit by more regs and unfair govt practices
What about off gas grid homes. Storage rads and oil boilers are an issue in rural homes
No wonder every landlord I talk to is getting out