New Decent Homes Standard could cost landlords billions

Landlords will need to fork out £26.5 billion to meet the new Decent Homes Standard, according to government data.

Statistics published by the government for its English Housing Survey Briefing: Modelling a new Decent Homes Standard reveals landlords will have to spend billions to meet the new standard by 2035.

Under the new standard, landlords will need to meet certain criteria, including that homes must be in a reasonable state of repair and provide core facilities and services, including a kitchen with adequate space and layout, an appropriately located bathroom and WC, and adequate protection from external noise.

£26.5 billion to meet new standard

According to government data, bringing the private rented sector up to the new standard would cost £26.5 billion in total, approximately twice the £10.9 billion needed to meet the existing standard.

For the social housing sector, the total estimated cost is £11.3 billion. Of this, £4.8 billion would apply to local authority dwellings and £6.5 billion to housing association properties, roughly three times the £3.6 billion required to meet the current standard.

The government’s findings also show that failure rates increase under the new standard. In 2023, 21% of private rented sector homes were non-decent under the existing standard (around 1 million homes).

Under the new standard, this rises to 48% (approximately 2.4 million homes).

Costs of upgrading vary significantly

However, the costs of upgrading individual dwellings vary significantly. The mean cost, the average amount spent per dwelling, in the private rented sector is similar for both the existing and new standards, at around £11,000 per property.

In the social housing sector, the mean cost to meet the new standard (£5,937 per dwelling) is lower than for the existing standard (£8,476 per dwelling).

This comes as the government also announced that all private rented and social housing properties will need to meet EPC C targets by 2030.

However, the government has yet to clarify how it will work with landlords to achieve these standards, with industry experts warning energy efficiency upgrades will be costly for landlords.