Over a third of landlords will push back energy efficiency measures due to government flip-flopping on the issue.
Research commissioned by tax and consulting firm RSM UK shows that 35 per cent of businesses will roll back action to meet ESG goals due to last year’s government announcements to delay deadlines for several low-carbon targets.
In addition, nearly one quarter of UK landlords think that the real estate sector is currently not making quick enough progress to reduce its carbon footprint in line with the government’s target net zero emissions deadline.
Additionally, half of landlords think that the sector is making little or no progress in effectively developing and implementing environmental, social and governance policies, slightly down from 55 per cent the previous year.
A large majority (82 per cent) agree that real estate businesses need to have strong environmental credentials or plans in place in order to access financing from lenders, yet more than a third of landlords see access to funding as the second highest barrier to investment.
Landlords perceived the biggest barrier to de-carbonising the real estate sector to be lack of cost-effective tech solutions, lack of landlord willpower to invest in environmental solutions and the impact of the energy crisis.
A spokesperson for RSM UK says: “The government’s flip-flopping of its net zero targets is problematic for the real estate sector, and it is no surprise to see landlords pushing back plans against the revised targets. However, taking the foot off the gas now will slowdown progress and create an even bigger barrier to finance in the future if credentials slip.
“This highlights a disconnect between industry and policymakers, and signals a real need for collaboration to ensure real estate remains at the forefront of driving the UK’s transition to net zero. But, this will require investment to develop new technology to create green solutions and upskill workers – which is challenging given the volatile economic climate and the impact of the energy crisis.”
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It would seem foolish for landlords not to want to improve the quality of their assets. Rational investors make decisions that increase the underlying value of their assets. Without an EPC of ‘Running Cost’ Grade C and ‘CO2 Pollution’ Grade C domestic landlords will find it impossible to refinance and impossible to secure a retirement sale to a purchaser requiring mortgage finance.
Yawn....
EPC recommendation to spend £30k to upgrade from a D to a C. For an annual energy saving of approximately £100 PA, plus ruining an irreplaceable solid wood block floor to install underfloor insulation? Now that to me is even more foolish. BTW, I had no problem selling it as a result for more than the asking price either.
Yes, Yes, Martin is right! We must spend a fortune on save our tenants a measly amount whilst being unfairly taxed on income not profit! And we must aim for some deeply flawed, mystical EPC C grade even though it is not even a relevant measure!
Gibbo is off again. 🤪
Agree or disagree with Martin but he has a point. Mortgage companies in future will be asking the EPC grade on lending
Nonsense
We refinanced 4 double D EPC properties just before the disappearance of sub 2% deals.
We weren't even asked for EPC information, just as no tenants have ever asked for them.
Having been both buyers and sellers often over the last 30 years, EPC has NEVER figured in our negotiations.
Does he ever give it a rest with his tiresome nonsense?
@ Saul Smart, you must be new here. LOL
Gibbo is like the Duracell bunny, he goes on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on.
Martin, you are correct about rational investment but I'm unclear what you are recommending. It is also rational *not* to invest in an asset where the ROI is very poor.
So if mortgage companies or HMG regulations require EPC C (why not A, if they're so devoted to net zero? And why not owner-occupier mortgages too?), rational behaviour for landlords if the investment costs are too great will be to sell the problem to owner-occupiers, who face no such requirements and don't have to pay 28% CGT when they sell. Landlords will either then buy a replacement property that is already C, or more likely reduce debt and reduce their exposure to what has become a low-profit, over-regulated business sector.
Net zero policy with a heavy stick, minimal carrot, and targeted solely at landlords while owner-occupiers face no such requirements thereby means a net reduction in PRS property available for rent. And all because landlords have behaved rationally, as most were already doing before you made your observations.
Epc makes net zero sense
It’s comforting to see Gibbo back on form 👍🏻🫣, but to the article…. I have done nothing, and will be doing nothing.
It would be foolish for landlords to remain in a Business providing a fat living for lawyers & free loaders, 3 of the Articles today are about lawyers drumming up Business for themselves to the disadvantage of the Tenants getting them involved in legal rangling.
The Auction Houses are booming with landlords getting out, don’t think many Tenants will be buying them as they are not in a position to do so. Many will need refurbishment that traditionally landlords were prepared to do, you can now forget about that. Suppose Tenants in general were to buy won’t have the knowledge, ability or expertise apart from finance to do it. They won’t have the inclination either and want to continue Renting.
Times have changed since the years gone by when young people in their twenties wanted to settle down buy a home and start a family. Those days not even a consideration now until their 40’s when they realise they are getting older and get scared they might miss the boat.
Sell sell sell Labour this way cometh
Tax, tax, tax the Chancellor cometh.
Capital gains on inflation Martin Lewis says only 4% have to pay it, am I the only one so scrap it now.
I can’t understand it anyhow so you want to sell get a valuation from a Chartered Surveyor Deduct the purchase price and pay 28% tax on the balance more or less.
OK you pay income tax on income for all those years but the initial purchase price is not the price you paid, it also cost you the Bank extra on top for years, half the price of a house again on top, and you already paid tax on the payments to the Banks. Scrap it in the Budget
Can I be clear If we put up the rent the government will get, at least, 20% of that
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