The Labour government has been so focussed on winning the vote of tenants with a host of anti-landlord proposals that it has ignored the wider implication for the private rented market. That is according to the director of Benham and Reeves in London, Marc von Grundherr.
He points to Energy Performance Certificates (EPC) and the government’s plans to make landlords upgrade their rental properties to ensure they have a minimum EPC rating of C by 2030.
The new requirement is part of the government’s Warm Homes Plan, originally outlined in its election manifesto. But von Grundherr believes that the negatives of this policy will far outweigh the positives.
He commented: “Since taking power, our new government has launched a range of initiatives designed to win the vote of the average tenant without much thought for the wider rental market and plans to make EPC requirements of a C mandatory are yet another example of this.
“Insisting that landlords make such a sizable investment into the energy efficiency of their property for what is, let’s face it, a very marginal improvement, is only likely to act as another deterrent to investors.”
The latest research by Benham and Reeves claims that it is going to take the average landlord more than 26 years to recoup the costs of upgrading a sub-C EPC rated property in line with government plans to improve rental property energy efficiency.
The agency has analysed the average cost of upgrading a single property to a rating of C or above in England and measured it against the expected annual cash savings that the improved energy efficiency will create to calculate how long it will take the average landlord to recoup the financial investment of improving their EPC rating.
The average cost of upgrading a buy-to-let property to an EPC rating of C or above in England is £7,396, according to the company. This improvement is expected to create an energy bill saving of £280 per year with energy prices as they are right now.
As such, it will take the average landlord a total of 26.4 years to recoup the cost of their EPC upgrade with the money they save on their energy bills, says Benham and Reeves.
Landlords in London are facing the longest wait to benefit from their EPC upgrade investment. The average cost of upgrading to a C or above in the capital is £7,807 and the expected annual energy bill saving is £247. This means it will take 31.7 years to recoup the investment.
von Grundherr says it is also important to note that across the London rental market, a great deal of stock is formed of Grade II listed buildings, with features such as single sash windows and brick walls which don’t provide landlords with much scope when it comes to improving the energy efficiency of their property.
According to the study, landlords in the East Midlands are looking at an average timeline of 30.8 years, followed by the North East (29.8), East of England (27.0), North West (26.9), South East (25.3), Yorkshire & Humber (25.3), and West Midlands (24.2).
Even in the South West where the energy bill savings that result from upgrading to an EPC of C or above are stronger than any other region (£365/year), because of one of the nation’s highest average upgrade costs of £8,201 per property, it still takes an average of 22.5 years to recoup the cost.
von Grundherr added: “Current plans provide no guarantee that carrying out any work will actually improve an EPC score and when you also consider the lack of tradespeople and the high prices they’re commanding as a result, it’s no wonder many landlords may think twice about their future within the sector.
“Those [landlords] who do remain [in the PRS] will inevitably have to pass any cost incurred in meeting an EPC C rating onto the tenant in the form of higher rent, further exacerbating the current issue of rental market affordability.”
Vast majority of landlords are concerned about plans to scrap Section 21 evictions
Another one Marc, says it exactly as it is.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Yes, let’s make tenant live in cold, damp expensive properties so wealthy landlords can save a bit of money. Makes perfect sense
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
As I said to you before, take this up with Jas Atwal MP [Labour], the largest landlord in Parliament, and a real rogue landlord.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
What if tenant was living in warm, no damp at all, 30% cheaper than market rent property?
And she already had latest boiler, windows, doors, kitchen etc.?
That was EPC D?
And she was perfectly happy?
And she’s just decorated her living room gorgeous?
And Govt comes along & says we got to rip out all your nice decoration u just done.
Gonna’ tread over all your new carpets.
5 builders in your home of 20 years for 2 weeks.
Make your house smaller.
But you will save £10pm gas bill.
And u will then be EPC C.
But it’s gonna’ cost your Landlord £10,000.
And that cheap rent you got, he not be able to afford you that any more, it’s gonna’ cost you £3000 per year more to bring in line with market rents.
Ooh & you gonna’ get mould & condenstion next year cause this 1920’s house wasn’t made to be sweated up with all this internal insulation.
But we the Govt will look good to the voters as can say We are making loads of houses EPC C.
Am I Einstein or are Govt & Council’s thick? Has anyone been to ask the tenants who HAVEN’T GOT A PROBLEM what they would like?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Spot-on, Mick.
Tenants should be given the choice as to whether they rent a property at EPC D and above at £x rent, and pay a bit more on heating, or EPC C at £y rent, and suffer from mould, damp, and condensation.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
That’s it. These people have not got a clue. They assume all paying top rent for **** house.
That’s the only thing they hear about.
My tenants with zero problems don’t tell the Govt Ooh my Landlord Mick just done me a lovely new boiler. It wun’t make headline news.
Ooh I’ve just had new £900 composite door. So what we not bothered, I want to hear horror stories to slag the Landlord off & get votes.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
We have done everything possible from internal wall insulation, changing the heating system, etc but still only gained an E. Problem is the guys who do these EPC certificates have no idea. He marked me down for no double glazing when we had just one small window barely worth a mention not double glazed. He couldn’t be bothered to check the loft so put this as unknown for insulation. In one of my flats a tenant had used an old style light bulb in a table lamp he also marked us down for that.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I totally agree EPC certificates need a massive rethink. I have an older part thatch cottage with one and half thick stone walls but apparently neither count as insulated, I can’t do cavity wall insulation as suggested its two stone walls with rubble infill ……….. and if several feet of thatch do not count as insulation , what does – I might add the loft is insulated as well, but he didn’t bother to check either. And I was marked down for an old style lightbulb – it still works why would you replace it? Modern houses might comply to the current criteria but anything pre 1920 is a lost cause. My cottage is dry, warm , and frankly a hell of lot nicer to live in than many newer rented properties and my tenants are very happy but I no hope of it ever getting to a C rating, I could throw all the money in the world at it but it would still fail under the current criteria, so it will have to be sold. Not good for me, not good for my tenants either cos they will be forced to move. The whole thing needs rethinking. Many people who buy their own homes buy older properties with a D E or F rating and many decide the supposed payback on energy savings as defined by the current criteria’s make absolutely no sense whatsoever, and don’t bother to do them, so why force private landlords down this route, the costs will get passed on and just make rents higher where people are able to improve from a D to a C but many others will just leave the sector making supply worse and rents to rise.
Its sound bites for the masses without thinking of the consequences.
If you want to rent an energy efficient home then do so, but it will almost certainly cost more to rent in the first place and your heating savings may not be reflected in the rent increase you will be paying for a newer property .
Tenants are not forced to rent any privately owned property. If it feels cold and damp then walk away, I ‘ve seen many newer properties that frankly look a hell of lot worse for cold and damp than some older ones……………..
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Will soon be the case all properties are over insulated, blocking ventilation, trapping moisture and causing mould. What then, will government set a date for landlords to remove insulation?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Whilst I agree that these reforms will likely shrink the rental market of stock (we are starting to see this in London en masse) and cause more issues for people looking to rent, I think it was actually the Conservatives who first came up with the RRB and also minimum EPCs by 2028.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
True, which is why most landlords will criticised the Tories just a much for their persistent, headline-grabbing attacks on the PRS. At least it was just plain stupid, and not stupid and ideological like this bunch.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
It was & that’s why they scrapped the EPC as finally they realised impossible to do retrospectively on old houses while tenant living there. And many Landlords selling cause of it.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register