Landlords warn that energy efficiency plans are ‘dead in the water’

Landlords warn that energy efficiency plans are ‘dead in the water’

0:03 AM, 10th January 2023, About 2 weeks ago 54

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Landlords are warning that plans to improve the energy efficiency of homes in the private rented sector (PRS) are ‘dead in the water’ because the Government has failed to respond to a consultation on the issue which closed two years ago.

Originally, a target for all new tenancies in the PRS to have an energy performance rating (EPC) of at least a ‘C’ by 2025 was made by the Government.

It was then proposed that the EPC target be extended to cover all tenancies by 2028.

However, the consultation on the issue closed in January 2021 – with the Government not providing any response to it which has led to uncertainty within the PRS about what is expected.

Dates for improving energy efficiencies

Now the National Residential Landlords Association (NRLA) is calling on the Government to make clear that the dates for improving energy efficiencies are now ‘unrealistic’.

The organisation is also urging certainty for the market and wants a definitive timetable for the publication of a consultation response – and any proposed legislation.

Among the Government’s proposals was for all landlords to pay up to £10,000 to carry out the necessary improvements to meet the proposed EPC targets.

‘Want to see properties as energy efficient as possible’

The NRLA’s chief executive, Ben Beadle, said: “We all want to see properties as energy efficient as possible.

“However, the Government’s delay in responding to its consultation on energy standards in the private rented sector means its plans are dead in the water.

“The lack of clarity is playing a major part in holding back investment in the homes to rent tenants desperately need.”

He added: “In the interests of certainty, the Government needs to admit what we all know, namely that it has no hope of meeting its proposed energy targets for the rental market.”

Calling for any proposed cap to be linked to the average market rent

The NRLA is calling for any proposed cap on what landlords will pay to be linked to the average market rent for the area in which the rental property stands.

This move would, the NRLA says, see a landlord’s bill being tapered from £5,000 to £10,000 if rental and property values were considered.

Also, NRLA wants a package of financial measures to support a landlord’s investment, and this would include a new tax allowance for landlords who carry out remedial work towards meeting the Government’s Net Zero target.

‘Misguided assumption that landlords have unlimited sums of money’

Mr Beadle said: “The plans, as they currently stand, rely on a misguided assumption that landlords have unlimited sums of money.

“The proposals fail to accept the realities of different property and rental values across the country, and that the private rented sector contains some of the most difficult to retrofit homes.

“Ministers need a smarter approach with a proper financial package if we want to ensure improvements to the rental housing stock.”



Comments

DSR

10:05 AM, 10th January 2023, About 2 weeks ago

any consultation response HAS to include within it at least a reference to the number of factors that have impacted everything since the consultation was carried out. Covid, war, cost of living etc.

There are CLEAR ramifications caused by these factors - and these will not disappear by 2025 (if this is the year they plan on any intro of the planned C).

The reality is (even if the politicians dont admit it) that any proposal in its current form is doomed which is why I think its all gone quiet. Anything that adds to financial woe to anyone in business at the mo is a no no...you can see that my the stringing along of plans to address the energy issue for businesses just today.

The IDEA might be there and I'm sure that wont do away, but plans to implement C by 2025 are just not going to happen. The fear alone of a big payout for LL's has started Lexit (LL exit!) and that will increase regardless of the C plans as now mortgage rates and LL's personal income is taking a hit....some will just sell up due to many pressures.

The reality is there is and will be LESS to rent in the coming years as the buildings sector is stagnating. It will be suicide to then bring in legislation which will then start a whole wave of more LL's selling up.

I think if anything there may be a carrot approach to get everyone to a D - with a longer bedding in date (say 2027) to try and maintain some stability yet still be seeing not to U turn.....

as ever we watch and wait - not a lot else we can do!

TheMaluka

10:37 AM, 10th January 2023, About 2 weeks ago

I really like the acronyn LEXIT, a word which appropriately sums up the current situation.

Christopher Rattew

10:38 AM, 10th January 2023, About 2 weeks ago

Perhaps we should contact our MPs. The amount of work involved means that a first step needs to go to a D. There is also the issue that tenants do not understand the costs involved. Perhaps for properties not meeting the required level, the Landlord should meet the energy costs. As it suits our tenants, who typically come for a year or two, we do include bills. However, the risks of wasteful tenants need to be considered.

Luke P

10:55 AM, 10th January 2023, About 2 weeks ago

Reply to the comment left by Christopher Rattew at 10/01/2023 - 10:38
Perhaps you should keep your ridiculous ideas to yourself! 🤦🏼‍♂️

Karen

10:58 AM, 10th January 2023, About 2 weeks ago

Reply to the comment left by Christopher Rattew at 10/01/2023 - 10:38
Good luck with covering the energy bills. Tenants will just leave the heating on 24/7.

Seething Landlord

11:03 AM, 10th January 2023, About 2 weeks ago

The EPC system is a bureaucratic mess and until they get that sorted it will be impossible to come up with any coherent plan for improving the energy efficiency of existing housing stock.

We currently have government advocating heat pumps which actually score worse than existing heating systems for EPC purposes, gas heating scoring better than electrical systems at a time when gas boilers are to be phased out, coupled with a total absence of any guidance as to whether expenditure on energy efficiency improvements incurred before the regulations come into force will be counted towards the maximum expenditure required.

Little wonder that any plans for improvement have been put on hold by landlords who take a pragmatic business approach to these matters rather than being influenced by the multiple articles that have appeared encouraging everyone to start spending money now.

TheMaluka

11:04 AM, 10th January 2023, About 2 weeks ago

Reply to the comment left by Christopher Rattew at 10/01/2023 - 10:38
Paying other people's bills will never work.

Christopher Rattew

11:10 AM, 10th January 2023, About 2 weeks ago

Reply to the comment left by TheMaluka at 10/01/2023 - 11:04
It seems to work quite well. The heating systems have good controls. Our recent rentals of £1,320 pm for a 2-rm flat and £1,000 for a studio flat (in Manchester) are significantly higher than rents where bills are not included and by an amount well exceeding our energy costs. As we are on 3-year business contracts for energy, tenants would also pay 3 times as much as we do.

Jeff Niehorster

11:19 AM, 10th January 2023, About 2 weeks ago

What do people think. Ive read recently that improvements to achieve EPC grade betterment are considered capital expenses. Surely if i upgrade windows to Upvc and replace old electric storage radiators with new eco efficient ones that would class as improvements. Any guidance would be appreciated.

Seething Landlord

11:39 AM, 10th January 2023, About 2 weeks ago

Reply to the comment left by Jeff Niehorster at 10/01/2023 - 11:19
Anything classed as an improvement is a capital expense unless there is a concession from HMRC, for example, replacement of single glazed windows with double glazing can be claimed as a revenue expense. Not sure about upgrading storage heaters.

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