EPC targets not to blame alone for rent rises claim government

The government claims that rent prices are affected by various factors amid scrutiny over proposed EPC targets could push rents up.

In a written parliamentary question, Green MP Hannah Spencer asked what assessment the government has made of new Minimum Energy Efficiency Standards (MEES) in the private rented sector on private rent inflation.

Under the Warm Homes Plan, the government announced all private rented properties will need to meet EPC C targets by 2030.

Rental prices are not determined by a single factor

The minister for energy consumer, Martin McCluskey, said: “Rental prices are not determined by a single factor, and as outlined in the final impact assessment, wider market factors alongside this regulation may affect the rental prices of properties whether or not they are required to make upgrades under the MEES regulations.

“The government’s priority is to give landlords the regulatory certainty and advice they need to plan efficiency upgrades over the coming years, in consultation with tenants.

“More broadly, we are committed to protecting tenants’ rights by giving them the right to challenge unreasonable rent increases under the Renters’ Rights Act.”

Landlords may decide to leave the market

However, as previously reported on Property118, a government consultation documents admits some landlords could choose to sell rather than comply with EPC rules.

The document says: “Landlords may decide to exit the market. The likelihood of this is dependent on the current profitability of their rental property, the level of costs they face, the price landlords would receive from the sale of their property and their wider financial circumstances.

“The prices of EPC F/G PRS properties affected by the current regulations (requiring PRS properties to be EPC E) decreased by about £5,000 to £9,000, relative to unaffected properties.

“If a similar situation were to arise in the context of higher Minimum Energy-Efficiency Standards (MEES), landlords may decide it is more profitable to improve properties and remain as landlords. However, landlords who face the highest costs may decide, on balance, it is still less costly to sell their property than comply with the higher energy performance standard.”

The document also says some landlords may also decide instead to pass costs onto tenants through higher rents, but some tenants may decide to stay if higher rents are offset by lower energy bills.