EPC upgrade bill will see two-thirds of landlords selling up
3 years ago | 2 comments
Proposed EPC rules forcing thousands of landlords out of the PRS
11:10 AM, 11th May 2023, 3 years ago
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The government’s proposed EPC rules are already forcing thousands of landlords to leave the private rented sector (PRS) because the cost of improvements will be so high, research reveals.
Data shows more than 65,000 rental properties were put up for sale by landlords in the first three months of 2023.
Of those, around 36,500 had energy efficiency ratings of D or less, the analysis from TwentyCi reveals.
The government’s aim of meeting its ‘Net Zero’ target has a proposal currently of imposing a minimum EPC rating of C in 2025 – but there is confusion because that is not a law, and it appears that the new deadline will be moved back to 2028.
Landlords looking to sell in a bid to dodge the EPC red tape
However, experts now say that landlords are looking to sell in a bid to dodge the EPC red tape because the retrofitting bill for a rental home including heat pumps, insulation and double glazing could run into tens of thousands of pounds.
Chris Norris, of the National Residential Landlords’ Association, told the Daily Telegraph: “Depending on where that property is and what kind of value it has, it’s difficult to maintain a viable letting portfolio if you’ve got to spend, say, £25,000 on a property that may only be worth £60,000 to £70,000 if you’re in certain towns in the North East.
“The logical thing to do is to either retrofit or to sell off, and lots of landlords are finding that selling them is their best bet.”
60% of rental homes put up for sale this year
The market research shows that around 60% of rental homes put up for sale this year had an EPC rating of D or below- that is up from 57% seen 12 months ago.
The figures show that rental properties being put up for sale with a low energy efficiency rating is higher than normal – and the sale of rental properties that have a C rating are down by a fifth.
Max Armstrong, of buy-to-let specialist firm North East Property Investment, told the newspaper that many landlords did not want to spend cash on retrofitting their properties until there was clarity of what the EPC rules will be.
Energy efficiency rules for the PRS
There was also confusion, he says, for new property investors over the energy efficiency rules for the PRS.
He said: “One of the first things new investors are asking is, ‘What’s the EPC rating and what needs to be done? Have you factored into the refurbishment, how much extra it’s going to cost? It has quite a lot of impact on the overall deals.”
Mr Armstrong said many rental homes will struggle to get to the EPC standard and that the cost involved was not ‘financially viable’ for large numbers of landlords.
He added: “It’s a bit of a perfect storm. What’s going to happen to these properties? Are they just going to sit empty when we know we’re struggling to house people? It doesn’t seem to make sense.”
Tags:
energy efficient, Energy Performance Certificate, EPC, landlord, Net Zero, Property sales, regulations, selling
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Member Since January 2015 - Comments: 1446 - Articles: 1
12:59 PM, 11th May 2023, About 3 years ago
I want to know what will happen in 2030 when ALL residential property will have to meet EPC A-C, unless exempted.
Will owner occupiers whose homes cannot reach the minimum C band, either because home owners cannot afford to do the works or for some other reason, be put out on the streets?
Just a thought!
Member Since May 2017 - Comments: 765
2:50 PM, 11th May 2023, About 3 years ago
Reply to the comment left by Judith Wordsworth at 11/05/2023 – 12:59I am not aware of owner occupiers having to meet EPC C in 2030. My understanding is that all tenancies, new or otherwise must meet EPC C by 2030. Maybe I’ve missed something?
Member Since March 2022 - Comments: 365
3:44 PM, 11th May 2023, About 3 years ago
Headlines from property press over last couple of weeks can be linked up to provide a narrative of what is happening in the PRS.
“DOUBLE WHAMMY FOR LANDLORDS Interest Rate Rises AND Section 24
Record number of landlords are selling up – NRLA
Shock poll finds 44% of landlords will sell up
Early BTL investors are retiring and selling up
Proposed EPC rules forcing thousands of landlords out of the PRS
Landlords continue fleeing PRS as tenant demand rises
Significant drop in letting instructions as landlords flee buy-to-let sector
Paragon Bank reports highest ever tenant demand
Tenant demand reaches a record high
Letting agents report ‘very frenetic’ market conditions for would-be tenants
Rents hit another record high”
But looks like nobody is listening.
Member Since March 2022 - Comments: 365
4:13 PM, 11th May 2023, About 3 years ago
Reply to the comment left by JB at 11/05/2023 – 14:50
There is a bill “The Minimum Energy Performance of Buildings (No. 2) Bill” currently undergoing its second reading that could become law. It proposes that.
Mortgaged properties
All mortgage lenders must by 31 December 2030 ensure that the average energy performance level of their domestic portfolios is at least EPC Band C.
Owner Occupiers without mortgages
Homes to which this section applies must be EPC Band C by 2035,
Social housing
All social landlords must ensure that a significant amount of their residential properties are at least EPC Band C by 2035.
Looks like the way the PRS is probably going is the way everyone might be going eventually but nothing is for sure and all this only serves to make people jittery. If the mortgaged properties part comes in it will be cash buyers only for any property not rated A-C after 2030.
Member Since August 2016 - Comments: 1190
4:23 PM, 11th May 2023, About 3 years ago
“You will own nothing and be happy” say the WEF. Seems this is one of the ways they’re going to do it. And with mandated vaccinations you won’t even own your own body. I’m not sure even George Orwell thought things would go this far.
Member Since February 2018 - Comments: 627
4:31 PM, 11th May 2023, About 3 years ago
“and that the cost involved was not ‘financially viable’ for large numbers of landlords.”
That could equally read and that the cost involved was not ‘financially viable’ for large numbers of properties.
Member Since August 2014 - Comments: 175
5:42 PM, 11th May 2023, About 3 years ago
This is a takedown of the UK property market, plain and simple. I think the plan is for as many independent landlords as possible to be driven out of the PRS and the solvent and desirable tenants with jobs driven into the corporate owned BTR sector.
The lower earning undesirable tenants will either be evicted by their landlord who is forced to sell due to unaffordable energy upgrades and become homeless, or will stay put and refuse to pay rent or move out, thereby bankrupting their landlord. The property will be confiscated and used by the local LA to house homeless illegal immigrants. The former landlord will become homeless.
Landlords who don’t sell up will find their properties eventually expropriated by Local Authorities, for whatever spurious reason the LA decides, to house homeless former tenants and illegal immigrants. The former landlord will become homeless.
Owner occupiers who can’t afford the EPC upgrades will find they can’t sell their properties and will stay as long as possible until the Govt declares their home to be “illegal” for whatever reason they decide. The owner will be evicted and the property turned over to their local LA to house homeless illegal immigrants. The former owner will become homeless.
After the UK property market has been devastated the national, ie Lloyds Bank and international, ie Blackrock, investors will swoop in to buy properties from distressed owners and landlords and so dominate the UK property market.
Member Since January 2015 - Comments: 1446 - Articles: 1
9:41 AM, 13th May 2023, About 3 years ago
Reply to the comment left by JB at 11/05/2023 – 14:50
New and old tenancies must meet A-C EPC by 2028.
The 2030 for all residential owner occupiers is in the Bill.
The media are concentrating on the PRS, perhaps they’ve not read it properly, but it’s also owner occupiers beware/be compliant