NRLA chief blasts government over energy efficiency proposals

Energy efficiency reforms could be the “nail in the coffin of buy-to-let”, according to Ben Beadle, chief executive of the National Residential Landlords Association (NRLA).

Writing for the Daily Telegraph, Beadle said that while the NRLA “fully supports” making homes more energy efficient, the proposed blanket ceiling of £10,000 for landlords to improve the efficiency of each property is “unworkable” and “fails to reflect that in areas with low property values, landlords are unlikely to have either the rental income or the equity within the property to finance the works required to meet the benchmark”.

Beadle believes the cost cap should be tapered according to the Valuation Office Agency’s Broad Rental Market Areas, which are used to estimate market rents and set Local Housing Allowance rates. This, he explained, would mean a gradual taper from £5,000 to £10,000, taking into account the different rental values and, therefore, property values across the country.

Beadle also used the column in the Telegraph to condemn the government’s “hostile rhetoric” on private renting and private landlords, which he said has “dissuaded many would-be investors”. He added that tax policy has “reduced potential margins and hiked rates on capital gains, whilst uncertainty about rental reform has driven many to exit the market altogether”.

Beadle hit out at the government’s current silence on proposals made two years ago to require a minimum EPC rating of C for all new tenancies by 2025 and all private rented homes by 2028. This, he said, has “allowed confusion to reign” and led to landlords quitting the market to avoid unaffordable costs in the future.

“Ministers must restore confidence urgently, initially by making clear that the target dates envisaged in the consultation no longer apply given the long delay and by finally responding to their own consultation,” Beadle said.

He added that “government policy needs to properly support and encourage the improvements we all want to see”.

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4 Comments

  1. JWVW

    E to C is simply too much of a jump. It doesn’t take a ‘Brain of Britain’ to suggest that a move to a D rating first would be acceptable to most, with a move to C – say 5+ years later. The Govt should be protecting the PRS rather than strangling it with ever increasing costs, taxes and red tape.

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  2. Jonathan Rolande

    Points well made NRLA.

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  3. A W

    Roughly 5 million rented homes. Roughly 20% of them below C (E-D), meaning that around 1 million less homes available to let should the Government go through with their plans.
     
    In the midst of the worst housing crisis the country has ever experienced, reducing housing supply is the Governments plan… nice.

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  4. northernlandlord

    It is interesting (for me anyway) to look at official published estimates of EPC ratings over time. In 2020 the percentages were A/B 2.9% C 43.2% D 43.4% and EFG combined 10.5%. In 2012 these estimates were A/B( not enough examples to register) C 17.6% D 51.2% E 24.5% FG 6.1%. So things have really improved.
    I would think by now that most landlords and owner occupiers have carried out the “lower cost” and simpler improvements such as low energy bulbs draught proofing, new boilers, thermostats, windows doors and loft insulation possibly as a matter of maintenance as things wear out. This was sufficient to boost many E ratings to presumably lower D rating and some upper D ratings into lower C ratings. That the number of D rated homes has not drastically fallen indicates that for many properties a D rating is about the best you can get without resorting to more drastic and costly measures like floor and internal or external wall insulation, solar panels etc. (forget heat pumps as currently they will make your EPC worse if you replace your gas boiler).  So I would advocate eliminating E as the minimum for renting and make D the minimum. Uprating E to D should in most cases involve lower cost than uprating a D to a C.  Maybe a new boiler and thermostatic valves, which are a desirable feature anyway for owner occupiers and tenants might get you from E to D.  
    It is unfair to impose higher EPC ratings on landlords and no ratings at all on owner occupiers. The assumption is made as ever that landlords are loaded and we all have the odd £10,000 lying about. Many smaller landlords do not charge market rent so to base a taper on open market rent valuation alone and not on actual rent paid is very unfair. Many landlords who have lower  EPC rated properties let to benefit tenants do not achieve a rent of £10,000 a year. How many landlords faced with the prospect of increased regulation and making no income for more than a year, but are in possession of a valuable asset will just cash in and quit the business? Rental property is fast set to becoming a millstone around the necks of many small landlords.

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