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Too much, too quickly! Call for energy efficiency timescales to slow

A respected private rental sector body wants the government to slow its timetable for energy efficiency reform, warning that landlords could sell up if the current schedule remains in place.

The Lettings Industry Council has written an open letter to the Ministry of Housing Communities and Local Government, signed by 17 agencies and industry players.

These are Belvoir, Chestertons, Countrywide, Dexters, the Guild of Lettings Management, Hamptons, Hunters, JLL, Kinleigh Folkard & Hayward, Knight Frank, Max Estates, Maxine Lester Lettings and Property Management, Penhurst, Savills, Seraph Property Management, Spicerhaart and Squires Estates.

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They welcome the government’s interest in seeking eco-improvements in the private rental sector but have grave concerns about timescales - currently taking the sector to 2025 - and the effect of short term demands on the viability of many landlords. 

“With no information on how or when owner occupiers will need to comply with these energy efficiency requirements, more landlords may decide to sell to avoid the pressure of having to spend additional money on their properties” warns TLIC.

The Lettings Industry Council was set up in 2015 and looks at issues across the sector, including regulation of agents as well as landlords, and government legislation and proposals.

 

 

The open letter says: “We welcome Government taking action to improve energy efficiency in privately rented homes and fully support the need to improve our carbon footprint. However we would like to communicate the issues we foresee with the proposal set out in the consultation and offer our thoughts on an alternative solution. 

“The timeframe proposed in respect of implementing a minimum C rating is far too short. Landlords need time to recover from the financial hardship caused by Covid-19, relating to both personal and rental circumstances before being asked to invest further into the potentially significant refurbishment of their rental properties. In addition to many landlords dealing with rental arrears or rent reductions this year, tax breaks have been lost due to S24 of the Finance Act, electrical regulations have led to more expense and fees increased since the implementation of the Tenant Fees Act. 

“Stock levels outside of London are already low in the Private Rented Sector and we run the risk of more landlords exiting the market as further legislative pressures are added. The SDLT holiday introduced this year has already resulted in landlords deciding to sell their properties. With no information on how or when owner occupiers will need to comply with these energy efficiency requirements, more landlords may decide to sell to avoid the pressure of having to spend additional money on their properties. This could lead to a rise in homelessness if tenants are not able to purchase a property themselves, for example in recent years, and particularly in 2020, the sector has seen a significant increase in tenants signing up to receive Universal Credit. 

“If the maximum investment cap for energy efficiency works is increased to £10,000 this, along with additional competition due to less stock, will inevitably lead to rent increases which will most significantly impact those on low income and typically the more vulnerable groups of tenants.

“The consultation states that any money that a landlord spends on energy efficiency refurbishment works prior to 2023 will not be counted towards the cap. This means if the works are going to cost more than £5000 and they are carried out before 2023 then landlords will find themselves having to spend more money than the cap states.”

The Lettings Industry Council then sets out what it calls its alternative proposals.

“By April 2026: all new and renewed tenancies to have a minimum of D rating which is the average rating for all homes. 

“By April 2028: all existing tenancies to have a minimum of D rating and all new and renewed tenancies to have a minimum of C rating 

“By 01 January 2030: all existing tenancies to have a minimum of C rating. 

“Bring the start date forward for the refurbishment works cap from 2023 to 2020. We believe this will reduce the pressure on stock available in the PRS market whilst still achieving the overarching goal of  all properties in the PRS (unless exempt) achieving a C rating by 2030.” 

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

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    Whilst it would be helpful to have the dates pushed back as suggested, in my case it will just mean the date I sell my properties will go back by a couple of years. I can get to a 'D' but the expense of getting to a 'C' will still not be viable for a LL like me, with perhaps only 10 years left in the game.

    There is no realistic alternative to GCH until EPCs reflect the 'green-ness' of electricity so my electric only properties will have to go to the owner occupier sector and my tenants will be left looking for alternative accommodation in an ever decreasing pool of houses.

    If you agree with me that EPCs are unfair in their current state please look for my petition on the Govt website & sign it if you can. I can't add the link on this site but if you search for EPC it will come up. Thanks.

    Matthew Payne

    You can get exemption without ever getting to a C if you have spent some cash trying to get there, currently £3500, proposed to become £10,000 I think in 2025 if that proposal sticks, which I appreciate may still be unpalatable, but HMG acknowledges they arent going to get any LLs chucking £20k/£30k or so trying to get an old drafty Victorian semi up to a C ever.

     
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    I have got one old detached property that I managed to get from a G to an F a couple of years ago and got a exemption on that, maybe this is what will happen more exemptions.

     
    Philip Drake

    It’s laudable to vigorously address the climate change issue, however LLs need help as they cannot afford to apply the changes needed. So if the government need to achieve their target then they need to put some grant money in. The grant money needs to be applied in the highest benefit/cost priority order.

     
    Philip Drake

    At some point either exemptions need to apply or the property needs to be rebuilt, with better materials. Perhaps the government could help there too.

     
    Philip Drake

    Perhaps the C/D/E band aspirations should be changed to be targets based on the fundamental attributes of the originally built property.
    eg Victorian 2 bed terrace can only be expected to achieve, say a D band, any further money spent would be uneconomic to pursue.

    Whereas a 2000 build 2 bed terrace should be expected to reach for eg band B.

     
    Philip Drake

    As new materials and build/renovation techniques develop, perhaps the digital EPCs need to be connected to the new developments, so that the EPC is kept up to date, automatically, with the ways to improve its rating. So when the EPC is “printed or downloaded” then the most up to date improvement options, their cost and implementation order based on property disturbance, benefit/cost can be listed in priority order.
    Where property disturbance is the schedule of works order eg do the wall/floor insulation before laying the new carpets.

     
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    Well they say LL’s may sell up that is the 17 strong Agency but this is exactly what the Government wants, plain enough to see after all they have done to Bankrupt us. Another big pay day for them when we sell and the Big Boys waiting in the wings ready to take over with their Multi-Storey Blocks of Flats already Built that they can’t sell.

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    They are absolutely correct. My current plan is to sell my five EPC D properties, one a year over the next five years. The first set of tenants have already been told.

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    In my area tenants like the Victorian terraced houses, never a problem to rent them and rents increasing every time they are re let, what they don't want are high rise flats, it's going to be very difficult to get these old houses up to band C and I expect very expensive, which is just going to fuel rent rises still more, there is no joined up thinking here from the government, but then I expect that is too much to ask from the Eton boys

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    Focus on improving owner occupied homes first. There are far more of them, but that'll mean lots of angry voters! If reducing emissions is the key, go for the highest volume emitters first which in the UK would be owner occupiers, not prs tenants.

    What about social housing?

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    Here in Norwich there are big council estates built between the wars, they are dreadful and stand zero chance of coming up to a C rating, but of course this doesn't apply to social housing, strange that !

     
  • Neil Moores

    Whilst I appreciate the open letter being sent on our behalves I really wish that they would stop referring to "tax breaks being lost due to section 24 of the finance act" and call it what it is..."legitimate taxable interest expenses being disallowed....." An expense is not a tax break. Tax breaks are reductions in tax payable on profits, usually when a government is trying to encourage people to do something in particular....such as ISAs for example. Deduction of necessary expenses incurred to provide a property for rental is NOT a tax break.

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    The lefties keep protesting about things that don't exist and giving them emotive names. The Poll Tax and Bedroom Tax never existed.

    The former was a Community charge fairly levied at every adult able to pay it, but that rightly reduced payments for home owners which the lefties hated.

    The latter is the removal of the spare room subsidy, designed to free up larger rented homes for families to move into from overcrowded accommodation. Again the lefties attacked the wrong target and tried to prevent decent families from getting more suitable rented homes.

     
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    I'm getting quite stressed by all the EPC changes. I have spoken to several companies and none of them can tell me how to get my properties up to a C.
    The rules just keep changing.
    I have some homes built with the 80s cavity wall systems which only achieve a max D. If you put cladding etc on these homes then they are damp. I can't win its idiocracy.
    I want to sell but the CGT is a killer and then I have no income? If I sell then where do I invest? No pension till now 67 so I'm a tad stuck as to what to do.
    All my homes are modern, warm and efficient and my tenants are so happy. The only one unhappy is now me.

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    I'm not stressed about it, when we get there, if we get there, what are the government going to do, make us evict every tenant in a home under a C rating ? I think not, there will either have to be exemptions, as there are now, or very large government grants .

     
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    Once again landlords are being bashed yet owner occupiers don't need to comply with this climate alarmist nonsense. Changing energy ratings from E to D to C will make no difference to the climate, which incidentally has been changing for billions of years. Anyone who has visited China will tell you that anything we do is less than a drop in the ocean.

    John  Adams

    I agree that the likes of China and India, will likely counter anything we do for many generations, but that's not a reason to make homes more energy efficient. What is needed is a fair and properly run grant scheme for these retrospective improvements. The issue at the moment is the rating system, a property with a "D" from 10 years ago, may now not reach a "D" due to the changes in assessment, which makes the whole thing a movable feast and unaffordable.

     
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    Going off on a of a tangent Robert, the Council tax is so unfair. My wife & I pay full c/tax on our own, (£50 per week). Others on same road some with at least 8 adult occupants only pay the same, is that fair?. Many of those are getting State help money while we never drew a penny in our lives but always pay thousands in taxes, (20 million draw Benefit of some kind).
    The Poll tax would have been fair but the one’s contribute least wouldn’t pay but protest.
    There is bed room tax in many HMO’s, Sometimes Council require extra facilities like cooking & washing which may be better for Tenant but if behind a closed door the Valuation Dept’ comes & stick a c/tax band on it, (possibly £1100.00 pa) making the room too expensive and still charge you full C/tax on rest of the property. This is not a proper or fair tax in fact it couldn’t be more unfair, just add further insult this year increased by 5.9%, hundreds of this goes to the Mayor who despised us.

  • John  Adams

    What i find incredible is that the Government is still allowing developers to throw up houses that do not incorporate measures such as Solar PV, Triple Glazing, Rain Harvesting etc and other measures that are much easier at construction than retrospectively. In many areas of the country there are old pre-war terraces and back to backs that simply can't be fitted with Heat Pumps or Solar technologies and simply giving exemptions is not the answer, a proper grant scheme run by the local authorities to cover at least 75% of the upgrade costs or repurchase and rebuild is needed.

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    There are 2 major commercial - to - residential conversions near me that completed in the last couple of years. Both are electric only with EPCs of D with no potential to go higher. What happens to these - do they just get exemptions? Why were they allowed to be converted without extra energy efficient measures? It's a joke!

     
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