Why EPC policy will damage the housing sector?

As landlords sell, we are now seeing a smaller pool of rental properties, putting pressure on supply and increasing rents. All this was predicted but ignored by a government that saw landlords as a problem and not a solution.

Well, here is some breaking news: EPC targets are equally inappropriate and will do great damage to the rental sector and here is why I think so.

EPC policy requires landlords to set property at level ‘C’ by 2030. However, all other properties can remain at lower levels. The government are now aware that a higher proportion of landlord properties now reaches level ‘C’ than owner-occupied properties and no doubt claims this as a great success. They know this because they pay the Office for National Statistics to report on it.

However, what they are missing is that by 2030, there will be two tiers of property. A large slug of rental property at level ‘C’ and a large slug of other property below that.

Here is the elephant in the room: What landlord is going to buy a lower-rated property, pay the higher stamp duty, and pay the improvement costs in order to rent?

At that point, a would-be landlord would not buy a lower-rated property because it would first need to be made legally compliant at level ‘C’, and the costs would likely be too much. This two-tier system will put pressure on the PRS, effectively stopping homes from coming onto the market for renters.

It would be sensible for all homes to be treated the same for EPC targets, but apparently not by the government and housing minister Matthew Pennycook.

This is yet another example of damaging policy which must be reversed to avoid further damage to the PRS. Whilst previous governments were no better, it is a signal that the policies the government implement are important and for the sake of people who rent the housing, the policy must be consistent and stable.

What does the Property118 community think?

Thanks,

Paul