The government has launched an official consultation on proposals to make the private rental sector more energy-efficient - and they include hefty fines for landlords who fail to invest to reach the new targets.
A document released by the Department of Business, Energy and Industrial Strategy says the move to make the PRS greener is part of a government masterplan to de-carbonise buildings to mitigate the effects of climate change.
The proposals would see the PRS subject to ever-stricter energy targets in the next decade in order to:
- decrease bills for low income and vulnerable tenants, in support of the government’s statutory fuel poverty target;
- increase the quality, value and desirability of landlords’ assets;
- reduce energy bills for tenants and ensure warmer homes;
- support investment in the domestic retrofit supply chain across England and Wales;
- provide greater energy security through lower energy demand on the grid and reduced fuel imports.
Although there are some options in the 48-page document, the government makes clear that its “preferred policy scenario for improving the energy performance of privately rented homes” consists of four elements:
- raising the energy performance standard to Energy Performance Certificate energy efficiency rating Band C;
- achieving the improvements for new tenancies from 2025 and all tenancies from 2028;
- increasing the maximum investment amount, resulting in an average per-property spend of £4,700 under a £10,000 cap;
- introducing what government calls a ‘fabric first’ approach to energy performance improvements (this is improving the performance of the materials that make up the building fabric itself, before considering the use of mechanical systems).
This all looks likely to involve substantial investment by landlords in addition to any grants or subsidies, and measures to enforce the new regulations may ultimately involve agents and portals being ordered only to advertise those rental properties that conform with the energy efficiency targets.
The small print of the consultation document says it will give powers to tenants to request energy improvements, and allow local authorities to fine non-compliant landlords up to £30,000.
You can see the consultation document here, with details of how to respond.
The closing deadline for comments from landlords is 11.45pm on December 30, while the government says it will respond next spring. First work to be undertaken by landlords is likely to be in 2023 if the consultation’s timetable proves reliable.
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How are going to get the average Victorian terraced house up to band c ? even if we could the cost would be massive, and what happens to costs ? oh that's right as with any business they get passed onto the end user.
Can't be claimed as as an expense, as presumably it will be treated as betterment and will only be available against CGT when you eventually sell.
Replacing single with double glazing counts as an expense as does renewing a boiler. Using self assessment it's very likely that income tax relief as your highest rate would be available, but that doesn't necessarily mean that this stuff is a good investment for any landlord or tenant.
I have never had any tenant ask to see or discuss the epc rating of any property. Many even linger on the highest standard tariffs instead of shopping around so saving energy costs is not a priority for the average tenant. The only energy they want to save is that expended on getting up off the couch!
This is probably much more relevant to owner occupiers but as said earlier the government doesn't want to upset them by forcing unnecessary and unjustifiable costs on them - so yet again go after the landlords!
Ans is you won't which is why over 5 years ago I suggested LL needed to offload their dud properties if not viable to increase to EPC C status.
For many LL as I suggested at the time it simply wouldn't be worth carrying out the works as it would take years to get payback if at all especially up North.
Far better to flog these terrace properties off to dopey FTB who won't realise that when they come to sell they won't be able to sell to any LL unless at a massive discount to factor in EPC C status costs.
Thereby massively restricting the market they are able to sell into.
Looking through many EPC's the 3 biggest contributors towards an improved score are low energy lighting , insulation for the roof and a condensing boiler
Double glazing doesn't seem to make much difference oddly enough
If the government has a 'masterplan' [LOL] to de-carbonise buildings, how about focusing on the 80% of homes which are owner-occupied, rather than the 20% which are rented? Oh yes, they want to be re-elected.
Not only will there be a number of properties that will not be able to comply it will drive a further significant number of PRS landlords to depart from the market and leave an ever dwindling supply of rental properties available
And that dwindling supply will make my properties more valuable, and I will be charging higher rental rates.
I love it...Very, very much.
Let's encourage the Govt. to carry on with what they are doing.
And a dwindling volume of houses for the Govt. to put their feckless tenants in for them to live for free.
And in the meantime, the capital value of my houses go rocketing up, and that allows me to increase rental prices.
Great deal if you ask me.
Carry on boys.
Tenant? What tenants, I will have to evict them as the property which was built in 1875 doesn’t conform to EPC requirements in 2021. Hope the social housing they Eventually get into Is a C or better
May the Lord (or whoever) save us from mathematically and physics illiterate do gooders who have pointless admin positions in councils and government.
May the Lord (or whoever) save us from mathematically and physics illiterate journalists who pointlessly parrot out this tosh.
There is a need to make sure a property is in good condition but I have had properties completely trashed within one let. You have two options with such tenants, let them have a pre-trashed property which they will feel at home in or let them go homeless on the street. As a landlord operating a business I have done the obvious things such as double glazing and not buying buying trash built properties (which are still readily available new as has always been so since the Doomsday book).
Another conundrum in flat blocks is loft insulation. More than likely the top flat has no rights to the loft space at all. Take that as you wish.
I don't have a problem with the general principle of improving the energy efficiency of my properties but I do have a problem with this proposal.
1. As already commented - the cost of getting a Victorian Terrace up to this level is prohibitive, if possible. I will sell mine to owner occupiers who don't care.
2. The EPC process is not fit for purpose - to get a better EPC I should rip out my highly efficient electric radiators (which can run on completely green electricity) and replace them with either storage heaters - designed by the energy industry to use electricity produced at night and horrid to live with; or gas central heating - which the Govt is trying to ban but which gives the highest EPC rating!
This will result in a complete lack of choice for tenants as the only houses that will achieve a C or above will be modern, featureless boxes and the numbers of these available will mean sky high prices. Where are all the tenants who cannot afford these going to live? In a Housing Association house - if they can get one - which doesn't comply?!
Can’t believe how the government is punishing the PRS. God bless the accidental LLs. It is becoming scary to be a LL
You had better believe it or else!!
Govt seeks LL destruction.
That is the simple reality.
Perhaps eradicate yourself before Govt does it on far less favourable terms.........................increased CGT!!!??
My last epc recommended wall lining costing £14k pa giving a saving of £275 , taking 51 years to break even
These idiots aren't living in the real world
Forget the energy saving how long would it take to get payback to pay for the EPC C status requirements!?
I suggest it would take at least 5 years.
So that is no rent surplus after costs for 5 years.
Why bother!?
Sell the dud property.
What is the point in retaining a property that won't produce a penny of spending money as any surplus is just paying for EPC C status.
Get rid of it now before people realise what it will need in 8 years time.
Sell to some dopey FTB or a possibly an even dopier LL.
If FTB want to improve the property to EPC C status let them do it.
Then come along and buy the house for exactly the same price as an unimproved property.
These FTB will struggle to resell as years go by and more people realise a property without C status is a dud.
It could never be used for letting unless it was lodgers.
Few LL will be interested in less than C status properties unless they buy at a massive discount.
Then they'll move the goalposts - making it harder to achieve a C grade then B then A until it's utterly impossible then they'll do us all a favour and take the property off our hands at knock down prices. We've spent all our money doing them up too...
That's obviously their long term plan.. greedy load of £$£@@!
Yep totally agree.
Lets face it Govt could take the dud properties off LL at a massive discount for social housing.
Substantial numbers of rental property would easily convert to social housing.
Govt wouldn't have to wait decades to build such homes.
These properties will fall into the Govt lap courtesy of those moving goalposts.
Personally I'm glad I won't be a LL in a few years time and will be well gone before C status is even thought about.
Of course when Govt buys all the dud properties they won't be subject to EPC regulations.
Wonder if the tenants will notice?
Well I guess some will as Govt will evict them as they won't qualify for social housing.
So they will be booted out to be replaced by some homeless scum.
Great!!!
So glad I won't be involved in the AST PRS.
Well this comment has to be from our old mate Paul, welcome back.
Anyone thinking of leaving the LL business and selling up after reading today's news ?
What has been the news.
Not seen any.
What is your take on it if it affects the PRS.
Personally I'm all sorted with my lodgers.
They are in for the long term such that now bit pointless selling when they are occupied.
Providing the aviation industry remains as is or gets better then I'm OK for the future.
I have NEVER removed any occupant who meets their contractual obligations.
I therefore won't be removing anyone to sell.
I will wait til they vacate which they all eventually do and then consider selling up.
I am able to list for free on the major web portals.
I have the listing ready to go but won't bother using it.
As I list when I do sell I won't be paying any commission to EA!!
Can't beat free!!
Definitely an option .
Had enough of the BS the council / govt are up to .
Send it spend it rolling along...
Just thought you would like to know last year I put in double glazing ( replacement of very old double glazing) . I phone the tax man and it was allowed as a tax deductible expense .
Even replacement of single glazing with double glazing is tax deductible, although it could be regarded as an improvement. A rare example of common sense from HMRC.
The problem with EPC ratings is from my experience of paying for the heating in over 140 HMOs is it bears no relation to the heating costs. I am probably one of the few people who compares the cost of their heating and has so many properties they pay for the heating so can identify the inconsistencies. The conservation industry is just a massive con. Not only does the EPC rating not make any difference but installing energy efficient boilers,installation and double glazing does not make any difference to my heating costs.
If you don't believe me come and check my properties I'd love you to be able to save me money and you will not be the first to try and who wanders off muttering, ' but the book says!'
I think, if there is any future energy conservation will be looked back on as a waste of effort and far worse.
Jim Haliburton
The HMO Daddy
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