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2022’s challenge for landlords - improving energy efficiency

Propertymark chief executive Nathan Emerson has given his prediction as to what the big issues will be in the 2022 lettings market.

“The private rental sector is still awaiting the Renters’ Reform White Paper with 2022 looking like it could be the year the UK government sets out the abolition of Section 21 and what will replace it. Many agents are warning of the loss of landlords from the market and the effect it could have on homelessness and rent rises” he says.

Emerson believes that energy efficiency - so much a part of the 2021 landscape - will be a major issue next year as well. 

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“But what we need to see from all UK governments is clarity and support for both homeowners and landlords. At Propertymark we are wary of the one-sized fits all approach currently being taken and the lack of funding support for landlords and homeowners to improve their properties” he says. 

“Policy makers must take into account the disparity of age, size, location and construction of the UK’s housing stock when deciding how best to tackle this huge challenge. 

“Since the failure of the green homes grant, the approach has felt decidedly more stick than carrot; penalisation via green mortgage targets and restricting landlords who can’t achieve an EPC rating C band risks stalling the market and depleting the PRS.”

He says his organisation has been worked with UK government departments plus the administrations in Wales and Scotland to look at financial solutions to the huge costs involved in upgrading properties for energy efficiency. 

And he concludes: “The fate for both the sales and rental markets in the next 12 months will rest upon the COVID-19 pandemic. Heading into winter there is an anxiety of the Omicron variant with the UK government moving to Plan B measures - which could push a new wave of movers looking to change their surroundings, or we may see more wanting to stay put until life feels more certain.”

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    With interest rate rises adding to the financial pressures on LLs the Govt needs to take the following action if it is to avoid a tsunami of LLs leaving the sector and precipitating a housing crisis:

    1. Sort out the EPC assessment so it is an accurate and fair measure of energy efficiency instead of a cost based measure
    2. Set the next target to EPC D to allow / encourage LLs to improve as many properties as possible
    3. Introduce a financial aid package to allow LLs to complete more expensive upgrades
    4. Set the timescales for further upgrades at a manageable rate to allow LLs to plan for the work

    Bringing in EPC C for 2026 /8 when we are already in 2022 and with an algorithm that is opaque, flawed & unreliable will result in many LLs heading for the door rather than undertaking expensive measures with no guarantee of achieving an EPC C. As ever, it will be tenants who suffer as rents go sky high and properties disappear from the PRS.

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    So very true Tricia, unfortunately there are failings associated with EPC's and more particularly those who actually carry out the assessment. I had the EPC's of a number of my properties done dur to the originals being due for renewal and observed that no allowance had been made for insulation in roofs whether pitched or flat. I mentioned to the assessor that he had not allowed such insulation and he said that they - assessors - are instructed that their assessments should not be "intrusive" and that going up steps etc for access is not to be done, result is that several of those properties have an EPC rating of "D" or "E". Now, that creates a total farce for all of us who, given the current obsession of Government/s about insulating external walls of properties which, is not only impractical whether a tenant in situ or not but, for many of us apart from the installation of PV panels is the only other realistic, but very expensive "solution" in improving the EPC rating of our properties. Unfortunately anyone, from any background can do the course and become an Energy Assessor and accordingly very few have any instinct or experience to do other that what is presented to them when becoming "accredited".

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    Its interesting isn't it that installing solar panels gets you the EPC C whilst not reducing your carbon emissions from your GCH? Another example of how farcical the assessment is. I am not prepared to invest my money chasing these nonsensical & ever moving targets - show me the door!

     
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    We are in agreement Tricia, after 27 years as a Landlord I have started to "shed" my properties and would imagine that many others are similar, principally as a result of the constant impositions being placed on Landlords, including mind numbing concepts being put forward in the name of energy efficiency.
    The original reasoning for improving the EPC rating of those properties let by private Landlords - as was stated by Minister/s - was to ensure that their EPC rating/s are brought into line with those privately owned properties in the same area. This without doubt based on total falsehoods/lies, as I don't know of any of the properties in the general vicinity of any of my properties that have measures that surpass those associated with my properties in regard to energy efficient measure, indeed many fall behind mine.
    Rather annoying that we are dealing with people who have no idea at all.

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    I agree. My rental properties are all within a 15 minute walk of my own. They are all D rated as is my own. I can’t afford to upgrade my own property never mind my rentals so I will be selling up before the deadline.

     
  • George Dawes

    This is the beginning of the end for the prs , it’s pretty obvious where we’re all headed …

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    Totally in agreement with you Tricia! Its about time the government realised their own responsibilities and came up with a clear, logical and affordable plan setting out all the targets and and a clear map as to how we can acheive it. They must realise to acheive their objectives any plan must work for all parties and all viewpoints must be considered. Only then will we get a stable PRS and growth towards ending homelessness etc. Chasing votes from one class of voters won't do them any good. We are currently seeing the results of that!

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    To illustrate how ridiculous the EPC scores are I have the following 2 houses.
    My home is a detached house, built in 2004 with solar panels and an EPC rating of B90 occupied by me and my husband.
    One of my rental properties is a detached house, built in 1951 with a flat roof and an EPC rating of D63 occupied by 3 young professionals. Bills are included in the rent.

    I found gas and electric bills for both properties from 6 years ago, took the readings and averaged the consumption of both houses for the 6 year period. That allows for tenant changes and different usage, etc so should be more indicative than a shorter time frame.
    My house averages 2930KW electric and 14300KW gas per year.
    The rental averages 2567KW electric and 11175KW gas per year.

    The EPC on the older rental property is so bad because the assessor assumed the flat roof is uninsulated. Apparently it doesn't matter that in reality it uses far less gas and electric than a property with a much better EPC score.

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    The proof of the pudding etc as they say Jo.
    There is certainly a great deal of merit in the factual information in regard to usages etc to be part of the assessment, but of course much as is the case with so many other aspects of life at the current time, there is a great reliance on "computer modelling" whether being the weather, global warming, the Covid "problem" etc and, in this particular case the energy performance of properties which - as is always stated - if you put garbage in, you get garbage out.

  • Keith  Johnson

    The current EPC makes no sense, I got marked down because I had electric heating? The assessor said its more expensive to run than say a gas combi boiler, electric is 100% efficient so every KW you put in you get a KW back....unlike gas!, so it's not about energy efficiency its about the running cost.???
    We all know much of our electricity is produced by renewable technologies and carbon fuels are becoming redundant so the epc as it stands is completely outdated and flawed!

  • George Dawes

    Yet they’re pushing us all to go electric, reminds me when they pushed us to get diesel cars …that went well

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    Electric heating is not 100 % efficient. Windmills werre abandoned 200 years ago. Electricty generated by wind mills use a substantial amount of energy getting to the consumer, ie power loss in the circuits. Windmills at sea or on top of hills are worn out easily by the climate and weather.
    Smart meters have a remotely controlled switch so load shedding can occur when power is not being generated. Absolutely no need for a smart meter to tell oneself that electricty heating is expensive.

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