All landlords are property tycoons with deep pockets?

All landlords are property tycoons with deep pockets?

9:45 AM, 17th December 2021, About a month ago 34

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Proposals to force landlords across the country to pay up to £10,000 to improve the energy efficiency of rental properties requires a rethink, according to the national body for landlords.

In a consultation which closed in January, the Government proposed that by 2025 all new tenancies in the private rented sector should be in houses with an Energy Performance Certificate rating of C or better. It is proposed that this standard should apply to all private rented properties by 2028.

As part of this the Government has suggested that, in meeting these targets, landlords should be expected to pay up to £10,000 to make the necessary improvements.

Whilst the sector is still waiting for the Government’s response to this consultation, the NRLA is warning that the planned cap is based on a misguided assumption that all landlords are property tycoons with deep pockets.

NRLA research shows that private landlords make an average net income from property of less than £4,500 a year.

Recent figures have shown the scale of the problem the sector faces in meeting the Government’s ambitions. Across England over 58 per cent of private rented households have an energy rating below a C. Around a third (32 per cent) of private rented homes were built prior to 1919, some of the hardest to improve housing in the country.

The National Residential Landlords Association is calling on the amount that landlords should be expected to contribute to be linked to average market rents in any given area (known as broad rental market areas) as calculated by the Valuation Office Agency. Under the NRLA’s proposals this would mean the amount a landlord would need to contribute would gradually taper from £5,000 to £10,000, taking into account different rental values (and by implication, property values) across the country.

Alongside this, the NRLA is calling for a package of fiscal measures to support investment. This should include the development of a decarbonisation tax allowance, no longer applying VAT to energy efficiency and low carbon work and not charging council tax where energy improvements are being made to rental properties when they are empty.

Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “We all want to see as many energy efficient rental properties in the sector as possible. Besides being good for tenants, improvements made to rental properties ensure they become more attractive to prospective tenants when being marketed by landlords and agents. However, the Government’s proposals for the sector are not good enough.

“They rely on a misguided assumption that landlords have unlimited sums of money and fail to accept the realities of different property and rental values across the country.

“Ministers need a smarter approach with a proper financial package if they are to ensure their ambitious objectives are to be met.”



Comments

by hpbennett

15:36 PM, 17th December 2021, About a month ago

Reply to the comment left by neilt at 17/12/2021 - 13:37
I absolutely agree with you about the ventilation. Problem is that heat and ventilation are not intuitive bedfellows and tenants tend not to ventilate properly when it is cold. i am speaking from personal experience of a house that was almost too well insulated. I had so many condensation problems here caused as much by a young mum tenant drying clothes indoors and not ventilating. Eventually she left but she blamed me for the condensation problems! Happily they have not recurred. I do have further experience of older conversions where similar problems have occurred.

by steve gilbert

15:53 PM, 17th December 2021, About a month ago

Reply to the comment left by neilt at 17/12/2021 - 13:37
I think it is true. I have had personal experience of converting a house to two flats and being required to line all interior walls with Celotex. This was all taped up as a vapour barrier but 15 years later black mould was rampant between wall and insulation. Also even if one argued properly installed insulation does not cause mould, well it may be fine for ones own home but not for tenanted property. How many times, on a rental, have you comes across extractors and vents taped up or loads of washing drying in front of a radiator with heavy curtains closed and no windows open.

by John

16:19 PM, 17th December 2021, About a month ago

And of course tenants will be happy to pay higher rents for the new improved properties. I wonder if all council properties will meet these standards.

by Paul landlord

17:28 PM, 17th December 2021, About a month ago

Reply to the comment left by neilt at 17/12/2021 - 13:03
Thanks for your comment. Fortunately after 30 years in the business and a large portfolio which is my 'full time', I am very aware of capital/ revenue expenses and HMRC's differentiations.

The last time I checked though the approx £17k per property I'm being asked to pay to install EWI (external wall insulation) onto the old 9" solid brick terraces of which I have many, fell into capital expenditure and not revenue.

If I have that wrong I'd really welcome to be corrected. Because even if I was to do 10 a year for the next few years, thats still the thick end of £200k a year for the next 3 years im forced to spend thats not tax deductible against on my annual tax return.

I know that many other portfolio landlords with older properties share the same concerns and would welcome these forced upgrades to be revenue tax deductible.

All my older houses by way have the works- double glazing, HE boilers, max loft insulation and low efficiency lighting etc etc. The best they achieve is a D rating.

by geester24

17:45 PM, 17th December 2021, About a month ago

Reply to the comment left by Paul landlord at 17/12/2021 - 17:28
Same boat. Vaillant over other makes for combis tend to rate higher.TCVs on rads and room thermostat. 370mm in the loft.
Went to the trouble doing one large inside hall wall with 25mm cellotex etc as it was easy to do with a v proud skirting board and the EPC guy said it had to be 50mm to count so I'm left one point short of a C. He also said all the talk at his industry convention was don't worry as all this will come to nought anyway.Too many issues for tenanted properties.Where are they gonna go during work ?

by Colin Dartnell

19:08 PM, 17th December 2021, About a month ago

Reply to the comment left by at 17/12/2021 - 14:57
It is only on new tenancies, so the work would be done between lets.

by geester24

23:18 PM, 17th December 2021, About a month ago

Reply to the comment left by Colin Dartnell at 17/12/2021 - 19:08
Until 2028

by Gromit

9:41 AM, 18th December 2021, About a month ago

Reply to the comment left by hpbennett at 17/12/2021 - 15:36Ventilation system is a misnomer it should be called a heat recovery system otherwise insulation improvements are complete waste of money. Opening a window just lets out all the heat trapped by the extra insulation.

by steve136

10:07 AM, 18th December 2021, About a month ago

"Under the NRLA’s proposals this would mean the amount a landlord would need to contribute would gradually taper from £5,000 to £10,000."

My property makes £4800 per year before expenses, so yeah thats a hard pass from me!

by Peter G

12:58 PM, 18th December 2021, About a month ago

Reply to the comment left by Colin Dartnell at 17/12/2021 - 19:08Being able to make the changes between Lets depends on the tenancy length - which may be still going after many years (so where are the tenants going to live during the work?) - and any deadline the Government puts on this work being completed by, if before the tenancy end date.


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