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Increasing the ‘financial burden’ faced by landlords is ‘bad news’ for the PRS

This week’s announcement that landlords will need to pay the first £3,500 to make improvements to their properties to ensure they are minimum EPC rated E or higher has been criticised by ARLA Propertymark.

Under the Energy Act 2011, the government pledged to avoid any ‘upfront costs’ for landlords, but this principle has been disregarded by setting the cap as high as £3,500, according to the professional body for letting agents

David Cox, chief executive, ARLA Propertymark, described the new cap as “bad news for the private rented sector”.


He commented: “Over the last few years, the financial burdens faced by landlords have increased time after time, which is pushing rent costs up and driving buy-to-let investors out of the market.”

Cox is now calling on the government to show its support for landlords by reintroducing the Landlords’ Energy Saving Allowance (LESA) and extending it to include anything contained within the ‘recommendations report’ of an EPC.

But the Chartered Institute of Environmental Health (CIEH) disagrees with ARLA Propertymark, and all those who feel that landlords are being treated harshly when it comes to improving energy efficiency, describing the measures proposed by the government as ‘underwhelming’.

Although landlords who own some of the coldest privately rented homes have been required to improve these properties with energy efficiency measures since last April, the CIEH claims that many landlords have been able to ‘get away with doing nothing to improve energy efficiency’, due to what it sees as a ‘loophole’ in the legislation.

It points out that the private rented sector has the highest proportion of properties which are in Bands F and G for energy efficiency, and also the highest level of fuel poverty - 19.4% compared to 7.7% in owner occupied properties.

In 2017, CIEH, along with 15 other organisations, wrote to Claire Perry, energy and clean growth minister, asking her to amend the regulations to remove the “no cost” exemption from the regulations, where support is available to cover the cost of making energy efficiency improvements.

Responding to the consultation, Perry this week announced that landlords will be able to register for an exemption if upgrades will cost more than £3,500. But the CIEH says that this figure falls short of sector expectations.

Tamara Sandoul, policy manager at CIEH, said: “We are disappointed that the government didn’t set the cost cap higher.

“Whilst the response is still an improvement, the vast majority of tenants living in cold homes won’t be able to benefit from this minimum standard.

“The government’s own analysis shows that a staggering 50% of properties in Bands F and G won’t be brought up to a Band E with this new cost cap. That’s around 151,000 homes missing out on the benefits of having a warmer home that is cheaper to run. This also raises serious doubts over the government’s ambition to bring all property up to a Band C by 2030.

“We are also very concerned that third party finance for improvement such as Green Deal and local authority funding is to be counted as part of the landlord’s overall cost cap. Many of these funding sources take into account the financial circumstances of the tenant, however, the improvement will ultimately benefit the landlord.

“We urge the government to look at this again and work to make further improvements in their approach to tackling cold homes and fuel poverty.”

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  • icon

    Big surprise! People who can't afford to buy their own property are twice as likely to be in fuel poverty than owner occupiers! Previous articles have pointed out the nonsense of taking less fuel efficient properties out of the rental market. How fuel efficient are cardboard boxes or doorways? Until the general housing shortage is fixed, the government should be helping and not penalising the prs who are at least providing homes instead of cardboard boxes!

  • icon

    I have 1 property with existing tenants in that will need up grading by april 2020, this will not be easy as it is detached, built late 1800s with solid built walls, the tenants enjoy a low rent and are happy there, once i have up graded it the rent will no longer be cheap, which could well force the tenants to leave, so once again the people the government are hurting here are the tenants.
    also band C by 2030, Victorian terraced houses ? impossible !

  • Colin Lillicrap

    Is there a similar cap for non-domestic properties. It would be useful to hear what is happening in this sector as well.


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