There is growing speculation that the deadline for landlords to meet new minimum energy efficiency standards for new tenants will be extended until 2028, and will now apply to all rental properties. Landlords failing to comply will face a fine of up to £30,000.
During the tail end of 2021, the government consulted on a tightening of the rules which would require landlords to ensure all their properties have a minimum Energy Performance Certificate (EPC) rating of C, rather than the current rating of E.
Under the original proposals, the change would be enforced from April 2025 for new tenancies and from April 2028 for existing tenancies.
But with no major update since the consultation ended two years ago, The Telegraph reports that the 2025 date will be dropped, and replaced with a new deadline of 2028, giving landlords an extra three years to raise the ratings where needed.
Once implemented, up to two million landlords could reportedly be faced with having to increase the EPC rating.
Although nothing has yet been confirmed, it is thought the news could be officially revealed as soon as today, which happens to be ‘Energy Security Day’.
Rik Smith, head of tenancy services at Goodlord, commented: “It’s absolutely right to take steps towards ensuring all national housing stock is more energy efficient and better insulated. It’s not only the right thing for the planet but will also help lower bills for tenants and landlords in the long term. I’m sure the market will welcome the proposed extended deadline to get properties up to standard, but there’s an enormous amount to do before then.
“The energy efficiency task force has only just been assembled, so they will need to get up to speed extremely quickly if landlords are to be supported in this transition, and the EPC methodology also needs a significant overhaul to ensure it’s accurate and fit for purpose if it’s to be used as such a fundamental lynchpin in our housing strategy.
“Landlords across the market are already feeling pressure on many fronts, including rising mortgage rates, so we don’t want a lack of required infrastructure or not fit-for-purpose guidelines to lead them into leaving the sector.”
Tom Goodman, MD at Vouch, added: “With all market regulation, it’s vital to balance long- and short-term considerations. The last thing the sector needs is another push factor encouraging landlords to sell-up – there is already too tight a squeeze on rental stock. What we need now is a balanced and supportive approach from the Government on next steps, so that landlords are incentivised to make these upgrades and can afford them.”
But the head of My Property Box, Ben Quaintrell, has described government energy efficiency proposals as ‘unachievable’.
He believes that any proposal to bring the Energy Performance Certificate rating of rented homes from E to C will require huge investment that is far outside the means of many private landlords.
Quaintrell, whose estate agency group operates across the North East of England and North Yorkshire, said: “Improving the energy efficiency of UK homes is important, but this requires many thousands of pounds worth of investment within a very short timeframe.
“Achieving net zero energy efficiency targets in modern homes is relatively straight forward but the majority of our housing stock is pre-1960s and require huge investment.
“For example, many terraced houses were built with walls one brick deep while others don’t have the necessary minimum gaps for cavity wall insulation.
“The onus must not be on private landlords to carry the can, rather there needs to be a UK wide government investment plan that acts as a workable incentive – unlike its flagship Green Homes Grant that was scrapped after just six months in 2021.
“If enacted, these measures will only drive even more private landlords out of the sector at a time when demand is outstripping supply, which is leading to rising rents and placing even more pressure on tenants.
“There is no doubt this country does need to improve the energy efficiency of homes but it needs a workable government-led investment strategy which takes place over a more realistic time period.
“Energy efficiency has been discussed at all levels for many years without any real action. To suddenly expect landlords to find many thousands of pounds to raise EPC ratings from E to C in just five years is simply unachievable and will negatively impact the rental sector, which so many depend upon.”
Govt has to stop penalising tenants AFTER they’ve moved into their home.
Who’s paying for this then?
Cause if tenants are paying cheap rent ie. Landlord looking after em, & then
Council want £350 or £600 &
maybe £5000 or £30,000 to upgrade from E to a C, Landlord then says I can no longer look after u with cheap rent. Cheap rent doesn’t pay for these outgoings, I’ve now got to charge u what the Landlord is charging his better off tenants up the road who’s paying more to live in that New build.
I’ve got to start telling tenants soon You can’t live here past 2028 anyway, Govt say u can’t if EPC not a C. And your rent doesn’t pay for a C.
Has anyone asked the tenants what they want? We know they want the better house, but when u give them choice I can give u New build for £1000pm or EPC C for £900pm, or still decent house EPC D but not New build standards for £700pm or £550pm I know what virtually all my tenants say.
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This is another ill thought out Gov policy. They seem yet again to be so far away from reality, and protected by their own comfortable lifestyle that they cannot grasp the fundamental problem in achieving a ‘C’ rating for most homes over 100 years old. I would say half our rental stock is in this category. Late Victorian terraces and the like. Most have modern boilers and double glazing. Yet there is no way you can get these to a C without stripping every wall back to bare brick and installing massive amounts of wall insulation, which of course will also make the houses smaller internally by a not insignificant proportion. Don’t even mention air source heat pumps. The current EPC criteria does not recognise most of these brands or ground source. I have sold some fantastic houses with great insulation and air / ground source heat pumps and they did not get into band C!
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I’ve just had a tenant who’s been with me 15 years (20 in Mums house) refuse £6000 of free EPC work. Her house already thin and she din’t want to lose any more.Govt and Council are forgetting Have u asked what the tenant wants? Cause u only listening to the tenants who’s paying extortionate rents for poor accommodation.What about those that’s saying cheap rent for good quality house? Cause u putting their rents up and making them homeless
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I couldn’t agree with you more. We’ve done everything reasonable already for energy efficiency for some properties and they are still not a C. Good job I didn’t start cladding them all in flammable celotex insulation a few years ago! The technology doesn’t exist to sort this problem out yet as far I can tell, and I’ve done a lot of digging.
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Just won’t happen, the reality in electric only car sales has been put back by Europe and now our government reconsidering reality. Fine Landlords for putting people out in the cold now there’s another vote winner
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Agree with comments above, 40% of our portfolio (over 900 in South East) will not make this grade unless you completely gut them and start again. They (GOV) had no option but to push this date back as we have witnessed (and are witnessing) a large exit of landlords for the “perfect storm” of reasons. Any reader on this platform will not need these spelling out, so I will not insult the intelligence or waste time cataloguing the ill-advised interference’s in the PRS our government/s have made that have lead us only in one direction. Reduction of a competitive market, strangled supply lines and record rents.
I can only speak for my area, but in March 2017 there were 120+ rental homes available to let. Yesterday there were 16!!
On Tuesday night, a friend, who commendably joined the Police at 47 years old, texted me to say that her colleague had inquired at my office about a small one-bedroom maisonette to be told by my staff that we have 16 viewings already and they will call her next week if it’s still available. I checked with the team, and this was correct. All 16 had been pre-vetted so they did not want any more. 8 viewings first day and if the property was not let, another 8 the next, A viewing was squeezed in for her. She missed out to a professional on a higher salary.
This is the reality of government intervention. This is the reality of the relentless lobbying from Shelter and alike. This is the reality of green regulations being forced on this class of housing stock. I hope one day they will finally wake up and see the damage they are doing. Not to landlords, not to us agents but to the tenants. Quality tenants, doing good jobs and deserving a place to live. Trying to get on with their lives in little market towns like ours. Landlords that cash out/sell up are gone, the house/home is no longer an option for the Police constable above. I am sick to the back teeth of being presented with horror stories from what I would call the old council sector (which I take pride in saying I was bought up in) or putting it bluntly, the utterly feckless sector (landlord and tenant), being lumped in with the quality PRS. This narrative is deceiving and suits this ridiculous them and us portrayal of the professional landlord/tenant relationship.
Back to the green agenda……….without getting into the percentages of output created by every company, industry, house, car, man and beast in the UK, the PRS accounts for 20-22%ish of the housing stock so will (arguably) have a relative part to play in our nationwide housing stock carbon footprint. MEES mark 1 managed to exempt some, improve some and remove some from the rental stock.
Guess where the ones that were removed are? You guessed it, privately owned or air BNB with NO energy improvement all at.
The improved and exempt cohort above will NEVER make C.
So, if our government really wanted a better, fairer and more energy efficient rental sector, with more supply of good quality homes (not provided by their mates in the big funds/banks/corps) then how about this:
1. Bring in 2028 as this first target date on new ASTA’s, with a further deadline of 2030 for periodic (or whatever they replace both with). This reflects the impacts of interruptions (financial and otherwise) we have all experienced this decade thus far,
2. (see point 4 and 5) Maximum spend exemption condition introduced at £5000 per property in 2028/30 rising by another £5000 in 2035. To be clear if £5k in 2028/30 cannot get you there (C), you don’t spend it. You spend on all the smaller things but if any one single item takes you above this threshold an exemption is registered. Same again in 2035 but any lack of spend is carried over from round one, Ie – You do the radiator valves, loft insulation, new boiler in round one and spend £4000, the next thing you can do is solar/wall/floor insulation that is more (obviously) than £1k. You exempt on a max spend condition. In 2035 you now have £6000 that should be set against green improvement……and so on.
3. All energy efficient spends since 2017 to be included in any maximum spend thresholds calculated before exemptions can be gained. Ie what was spent in MEES mark 1 count towards the spend at 2028/30.
4. 200% tax relief on certain energy efficiency spends by landlords from 2024.
5. Reintroduction of full mortgage interest rate relief on homes in the PRS that offer C or above rating now.
We all know that the word incentive (carrot) is alien to the powers that be and probably the first word that came out of their mouths as babies was STICK however, maybe for once they will see some balance in meeting green agendas against the needs of everyday people right now. By that, I mean the tenants and landlord in this sector.
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When I walk around the streets of York, I see are row upon row of Georgian, Victorian and Edwardian houses. Unless they have been refurbished while empty; typically residentials, they are so, so difficult and expensive to bring up to EPC C, even assuming you can get the trades people. The rentals are, in the main, decent, but they are nowhere near energy efficient. Like everywhere, York has a rental problem, so you would think landlords are rubbing their hands in glee at the prospect of increased rents, but just recently, with EPC in mind, a local landlord sold all his sizeable portfolio. The prices were not viable for other BTL investors, when the work required and time off the market was factored in. Also, several nearby HMOs were sold a month ago, and will not be returning to the rental space. Giving incentives to install heat pumps is nonsense. The costs are extortionate [and will increase even more with a lovely government subsidy!], and without all the other necessary work to insulation, double glazing, new pipework and rads, and even a backup boiler, they simply don’t work.
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We shall start telling landlords with pre 1970’s properties to sell in 2027 and newer properties on BTL ……. you ain’t going to make any money.
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