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We Quit! Landlords may sell over strict EPC targets

More than half of landlords with properties rated EPC D or below are considering selling because of stringent energy efficiency rules on their way.

New research from The Mortgage Works reveals that 52 per cent of impacted landlords have thought about selling some or all their properties because they don’t think they’ll be able to either complete or finance work to reach the required standard.

Current legislation in England and Wales requires buy to let properties to have at least an EPC rating of E. However, to improve the energy efficiency, the government wants to increase the requirement to a C for all new tenancies by 2025 and for all existing tenancies by 2028. 

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Residential properties account for around 20 per cent of all UK carbon emissions.  

As a result, the TMW poll of more than 600 landlords highlights that those with larger portfolios are more likely to have considered selling some or all properties, with 58 per cent of those with between six and 10 properties admitting they have done so, rising to nearly two thirds of those with 20 or more rental properties. 

Landlords with just a few properties are least likely to have done so – a third with just one property saying they have considered selling.

More than a third of landlords with just one property say it is rated between EPC D and G, meaning they will need to undertake retrofitting work to hit the required standard. 

However, more than a half say they their property already meets the proposed energy-efficiency requirements.

Those with four or five properties say they have an average of around two properties that need work. This increases to four homes for those with 6-10 properties, seven for those with 11-19 properties and 12 for those who have 20 or more properties.

When asked what improvements needed to be made to improve the property, a third of landlords were in the dark. 

For those that did know, 37 per cent said they needed to fit traditional insulation, while a quarter need to upgrade the boiler, with a similar number saying work involved upgrading existing utilities

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  • George Dawes

    Just in time for the big boys to hoover it all up at knockdown prices … almost like it’s all been planned eh ?

  • George Dawes

    Boris compares himself to Churchill,he obviously means that chubby dog in the adverts

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    Will the Govt listen - or just plough on regardless? We know we have to improve the energy efficiency of ALL our housing stock but using a metric based on cost, favouring carbon emitting gas and penalising clean, green electricity makes no sense at all.

    Until the EPC is a clear, accurate measure of the energy performance of a property it is unrealistic to expect LLs to spend thousands on upgrading them.

    The Govt needs to switch to EIRs and make the assessment easy to understand with clear, achievable steps to follow to gain an improvement in the rating.

    We need to move to D first and then to C if we are not to lose thousands of properties from the sector and create a housing crisis of huge proportions and we need to bring the owner occupier sector along with us on the same path to have any meaningful effect on carbon emissions.

    Finally we need the Govt to understand that this is not a green-washing exercise but people's lives and livelihoods they are dealing with. We are already seeing spiralling rents and a lack of properties to rent - EPC C has the potential to decimate the sector and once LLs have left they will not quickly return, leaving the rental sector in chaos.

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    Hear hear Tricia, couldnt have said it better myself. Here is the limp wristed response from my MP when tackled about this issue.

    “The Government remains committed to the aspiration, set out in the Clean Growth Strategy, that as many homes as possible are improved to Energy Performance Certificate (EPC) Band C by 2035, and as many private rental homes as possible by 2030 where practical, affordable and cost effective. The Government recently consulted on improving the energy performance in private rented homes to EPC Band C by 2028 and will publish a response in due course.

    The Government recognises that financial support may be needed, in particular where poorer performing homes are occupied by lower income and fuel poor tenants. Therefore the Government has a number of schemes available including the Sustainable Warmth project, which comprises a third phase of the Local Authority Delivery scheme, as well as the first phase of the Home Upgrade Grant, which can be used for low-income households both on and off the gas grid. In summer this year, the Government consulted on the next iteration of the Energy Company Obligation scheme, ECO4, which will run from 2022-26 and will be worth £1 billion per year. The Government continues to support low-income households in private rented sector properties, subject to householder eligibility requirements.”

    No help from him then!

    Daniela Provvedi

    Hi Sandra, name & shame the MP?
    Thanks.

     
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    I seen a house at Auction with broken windows, no back door just a piece of plywood screwed over and 4 ft hole in the roof, it had EPC “C” and sold well

    Theodor Cable

    Madness.

     
  • Alan KENTON

    I own 5 Welsh properties of which 3 are stone cottages which would require outside and inside insulation to bring them up to a C rating on the EPC . This would brutalise their appearance and make them less roomy inside all for the sake of saving my tenants an average of £3.00 a week on heating bills. I am approaching my 82nd birthday and seriously considering selling the cottages over the next 3 years to take full advanage of my Wife's, and my allowances on Capital Gains Tax. I am dreading telling my lovely tenants as this will bring misery to us all.
    Alan Kenton

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    In the 30 years I have been a landlord I have met so many experience landlords who tell me the business is no longer worth it and they are selling: prices have increased ridiculously, HB to LHA, The 2005 housing act, licensing , abolition of fees, section 24 and so on yet I am still here . Am I worried about EPCs? No!

    EPCs are a con. I pay the cost of heating in my HMOs and the EPC has no bearing on the cost. I have no faith that the irrationality of EPCs will be exposed but I live in hope. From experience all these black clouds all turn out to have a silver lining .
    Jim Haliburton
    The HMO Daddy

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    I'm hanging on as well to wait and see how this all pans out, less landlords, less properties to rent will mean we can cherry pick our tenants and increased rents, I'm only selling if or when I'm forced to.

     
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    I bought a property rated C (69) in 2011, to which I have made some small improvements like energy efficient bulbs, draught exclusion. and carpets, and it has just been reassessed as a D (61). Yes the boiler is ten years older, but its replacement isn't even recommended as a 'point-scoring' improvement. Do the goalposts shift, or do thousands of pounds of required improvements rest on a flick of the EPC Assessor's pen? In addition, the flat was listed as 100m2 in 2011 and 67m2 in 2021, and it is not close to either (around 80m2). It's a bit of a joke.

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    I reckon 10 years is equivalent to 10 points lost due to the changes in assessment.

     
  • Theodor Cable

    This is all scare mongering about the Government shutting down tens of thousands of houses all across the country.

    Even this Govt. will not evict thousands and thousands of people onto the market that it supposedly throws them out just so they can buy all those properties at a reduced price.

    Where would they house all those people?
    Or am I dumb?




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    The Govt will not shut down houses but they may fine LLs and force them to spend the money. I won't be waiting around to see - I'm selling while the going is good.

     
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    Don’t remember it this way must be Shelters 2015 De-Regulation Act, implemented on 1st June 2019 fees ban.

  • George Dawes

    They’re just following orders , that went well in the 1930s ….

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    Yeah I think I'm done.

    There is a cost cap for improvements but why the hell is it not linked to property value or rentable income.

    The current cap is £3500 (which is a years rent for my properties) the government is aiming for a cap of £10k which makes no sense on a property worth £60k.

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    Just had EPC renewed on 1930s semi with D rating - same as every other property of that age in the area according to assessor. Has LED lighting, loft insulation was upgraded , just had new boiler and controls, DG windows and doors. To achieve C apparently will involve digging up concrete floor slab and relaying over layer of insulation and adding another layer to solid brick external walls... estimated max energy saving of £200 a year.. rough cost of job £ 30 - 35k 3 - 4 months work

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    I don't understand why LL are expected to bring rental properties up to a higher standard than home owners. A sensible approach would be for all properties both btl and owner occupied to push up to a D rating. If the government want higher than this then they should make grants available for the work.

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    There are many more votes to be lost in targeting owner occupiers, so politicians steer clear of doing so, especially Tory politicians.

    In Scotland most owner occupiers recognise the stupidity if the SNP policies so the SNP has begun to target them with mandatory interlinked smoke, heat and CO alarms in all homes by February 2022. Their voters, mainly renters, are too thick to realize they are not free and they will end up paying for them in higher rents.

    Incidentally grants rarely work and most taxpayers would be better off with less interference from the public sector or even "assistance" from taxpayer funded schemes and standing on our own two feet, making and funding our own cost justified investment decisions.

     
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    Wendy, exactly right it should apply to all residential property across the board regardless, not picking on one section of the community which is a fraction of the housing stock, how is present policy go to improve the situation over all by excluding 75% of properties. It seems they love to divide us and it works well, a bit like Settlement Status for renters it’s a nightmare and when I try to verify the documents on Government website the codes doesn’t work leaving us in limbo, anyway it only applies to England as I understand it, not Scotland or Wales, and all work load and costs transferred to LL, as with all other aspects of renting not a penny from anyone else and forget about rent increases that is not affordable that cannot work. Looks like my yields are about 2.5% not 6/8% the media would have you believe.

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    Some London LL’s the cherry pickers are getting good rents but many are not although hit with more regulation and far higher costs than other parts of uk. I have a property for example valued at £650k judging by some other sales locally let for £1500, pm.
    I know of a similar house out of town recently purchased a couple of miles from Luton Airport cost £375k and command a rent of £1800 pm, make what you will of that. London is high value property not matched by the return.

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    £650k would likely buy me 4 north city terraced houses in Norwich and each would rent for around £750 - £800 per month, why would I want to go any where near London ?

     
    Daniela Provvedi

    @Andrew T. I have a property in SE1 London. Smart 2 bedroom garden apartment which is worth £800k (as per Foxtons earlier this week).
    Very low mortgage left to pay, bought it in the 90's. I personally manage it myself.
    It makes approx what your 4 in Norwich would make.
    That's why. (LOL)

    (Just a little banter with you, I respect and "like" most of your comments normally 🤭😉)

     
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    Daniela, I'm just a Norfolk boy, out of my depth down there in London.

     
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    Ok 3 day course for £1000, now a qualified EPC assessor mmm all my properties will be C rated. This appears to be the cheapest way forward 😂

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    Tell you what Leon, I'll do that course as well, I'll give all your properties a C if you do the same for me, deal ??

     
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    Andrew £ for £ you make double your investment compared to London, it nonsense down here with 32 London Boroughs doing their utmost to grab every penny with licensing, fines, penalties and confiscation Orders, easy money for them with no input.
    Their fines are huge as is their legal charges sometimes in tens of thousands making a mockery of justice system.

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    The other point is you with the 4 Terrace Houses for £650k, you and I presume your good lady wife is not too presumptuous of me, can be passed on as part of your Estate the 4 houses free of tax with the nil rate band allowance, also giving you far more flexibility how to distribute your Estate to family members, we are stuffed.

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    We need a full menu of how many points each improvement will give us so we can work out what is possible or desirable.
    Some work is pretty much impossible in a tenanted property. Solid floor insulation or internal wall insulation would be a nightmare.
    Other work has approximately no inconvenience factor for tenants, such as solar photovoltaic panels or modern heating controls.

    The current way just a few measures are listed takes no account of what is legally possible. Leasehold properties can only have certain works done if the freeholder permits it. Listed or conservation area buildings can't have anything out of character.

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    Suffered far too much already with HMO requirements some nightmare trying to work around Tenants with hard wired electrics everywhere full of their belongings, fire doors, stops, frames up grading, locks, closers etc, see how you go on when you start using planers, routers etc making noise and dust with limited space to work, incidentally LL pays for all this big surprise but also have to pay the Council £1400. as a thank for forcing him to do it.
    EPC’s next problem some of mine are Victorian 9” solid walls beautiful yellow stock bricks with red architectural feature designs around windows & doors not like the plain rubbish looking building of today indistinguishable from office buildings. I don’t want to cover up this timeless maintenance free external brick work. Inside so difficult some have part open plan with fitted kitchens, then the electrics involvement and bathrooms ?, you are proposing to do this with Tenant in situ ? and now want longer/ indefinite tenancies making it impossible to get a vacant period to do it.

  • George Dawes

    Seems low energy lighting is the single biggest contribution to a good epc , so you can have single glazed windows from 1900 that rattle and glass falls out , an uninsulated tiled roof and still get a c ; My neighbour

    I recently spend 500k getting two properties up to c , after looking at all the recommendations from the epc person I should’ve just left it as was and just changed the blooming light bulbs ! 😆

    The whole thing is utterly ridiculous

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    One of my properties is an 1860s mid terrace house currently rated E. to get it to a C I need internal/external insulation, cavity wall insulation (it's a bl**dy single skin brick wall - where do I put it!), floor insulation, new boiler, flue gas heat recovery device (whatever that is), solar water heating and solar panels. £28k-40k. Saving the tenant a whopping £200 a year! No way am I able to pay that much as the tenants would need to be rehoused during the work at additional cost to me (and loss of rent during that time).

    Not a chance - it'll go on the market when I need to review my properties.

  • George Dawes

    Try changing the light bulbs and get an epc rating , You might be pleasantly surprised

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    Don’t know what to think gift rap the house in polyurethane foam stuff, then open the windows to let the virus out.

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    George, maybe he forgot to take photo of room stat.

  • Nick Payne

    The whole system needs some 'out of the box' thinking.
    Say for instance that installation of a large area of PV panels was enough to reduce the overall carbon footprint and energy cost to bring it up to a C rating. Of course it would cost a fortune so why not instead invest in capacity from a green energy generator, which would cost a lot less? So in a field of PV panels, some would be tied to my property. This would need to be tied to the property via the Land Registry entry but in general I think that this could work.

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