8:03 AM, 14th October 2022, About 2 years ago 29
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Nearly two-thirds of landlords say they would sell their properties in the next five years because of the burden of meeting stricter EPC requirements, research has revealed.
The findings from Shawbrook also show that the rising cost of living is driving tenants towards energy-efficient homes in the UK’s private rented sector.
Shawbrook says that nearly three-in-five (58%) of renters say they would be less likely to consider a property with an energy rating of D or below.
And that has, the bank claims, led to more than half (54%) of landlords making efficiency improvements in the last six months.
They also found that nearly two-thirds (63%) of landlords have brought forward upgrades because of sharp inflationary pressures.
The findings – drawing on views from tenants, landlords and mortgage brokers – are part of Shawbrook’s second report on efforts to improve energy efficiency in the rented sector, which continue to be influenced by the government’s proposed changes to energy performance certificate (EPC) requirements.
Although the plans have not yet been put into law, ministers have previously indicated that newly rented properties in England and Wales will have to meet a minimum EPC standard of C by April 2025 – tougher than the current E standard. The measure could also apply to existing tenancies from 2028.
However, despite the possible regulatory changes, Shawbrook’s research shows that a significant knowledge gap remains.
While eight-in-ten (78%) landlords say they have now heard about the 2025 proposals, more than a third know only ‘a bit’ about the plans.
Three-quarters (75%) of mortgage brokers are concerned their buy-to-let clients don’t know enough.
Which is leading to concerns that many landlords could exit the market, with significant effects on the availability of properties.
And nearly two-in-five brokers with buy-to-let clients have seen them exit the market rather than make energy efficiency improvements.
Emma Cox, the managing director of real estate at Shawbrook, said: “We know that many landlords are facing a difficult time because of the economic headwinds in the UK.
“It is therefore important that the sector provides all the support possible to help them meet sustainability goals and be ready for future regulatory changes.”
She added: “As well as the need for clarity from the government about its plans, the industry has a significant role to play in supporting landlords.
“Only by working together can we safeguard the future of the private rented sector.”
Chris Norris, the policy director at the National Residential Landlords’ Association, said: “The efficiency of our housing stock needs to improve but the challenge for the private rented sector is two-fold.
“On the one hand, there is the matter of the split incentive, where landlords are necessarily required to pay for the works but see little or none of the benefit.
“On the other, there is the net cost of the works required, which is substantial to say the least.”
He added: “The investment required in our housing stock represents a potential burden for many landlords that they are highly unlikely to be able to shoulder alone, without significant changes to the tax system and some form of financial assistance along the way.”
JB
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Sign Up10:12 AM, 14th October 2022, About 2 years ago
In my experience many tenants are delighted to secure ANY property to live in - as there is such a shortgage of supply.
ficodindia
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Sign Up10:15 AM, 14th October 2022, About 2 years ago
using the narrative of humans destroying our planet the WEF is going to achieve the WE OWN NOTHING AND BE HAPPIER goal.... they will force everyone to increase the energy efficency and put a lot of cost on the shoulders of the middle class to force the sell... so big governments with the money printer can buy everything leaving the people with nothing. is written plain text in their website but the bbc doesn't tell. the bbc is another poppet of the WEF and IMF and big governments.
i listen to the bbc sometime i just decode into the opposite for everything they say.
EPC is the goal to remove properties from us... be carefull and prepare to hear that is all fault of putin and global warming.
Ross Tulloch
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Sign Up10:16 AM, 14th October 2022, About 2 years ago
Luckily all my properties are C. All HMOs. With 200 plus tenants over the last decade I have never had any interest shown in what EPC rating the property has.
Reluctant Landlord
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Sign Up10:29 AM, 14th October 2022, About 2 years ago
Id love to see a survey that asks tenants if they even know what a EPC is! Furthermore ask them if the EPC was in any way a consideration of them renting the property they moved into? 99% would say it was the only accommodation financially viable. That's the REAL tenants priority!
Reluctant Landlord
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Sign Up10:31 AM, 14th October 2022, About 2 years ago
If this goes ahead the only LL's that do any upgrade to a C will ONLY bother if its financially viable to raise the rent. If not - its a no brainer. They will sell.
Tim Rogers
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Sign Up10:42 AM, 14th October 2022, About 2 years ago
I have one property which is 'E', it's built circa 1890, mid terrace with solid walls. It's due a new EPC and I doubt if it will ever reach 'C'.
Does anyone know anything about the suggestion for a dispensation for older properties? I don't seem able to find anything on Gov websites?
Hamish McBloggs
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Sign Up10:49 AM, 14th October 2022, About 2 years ago
It will cost me 1.5 years profit (calculated by pre Osbourne principles) on my last property. Infact, given the latest interest rates and current rampant government incompetence I suspect that it may be many more than 1.5 years of profit.
I will therefore derive zero, probably negative income over that time and still carry risk.
No income means the family home falls further behind while, (if I were to attempt to improve the EPC before 2025), I can observe my improved property from a distance whilst wearing another wooly hat.
All sensible improvements have been carried out at significant cost. I used the information provided on the EPC and to stand a cat-in-hells chance I will need to:
Change the boiler
Underfloor insulation
Solar electric
Solar Thermal (water)
Heat pump
Grants? Support? Hahahahahahahahahaaaaaaaaaaa
The schemes to date have been unworkable, cumbersome, limited ... new schemes time limited, fund limited ... heat pumps too new and expensive and are a developing technology with business models in double glazing salesman territory ...
The sheer amount of effort and expense to begin to make this happen is untenable.
The fundamental reason that has to be acknowledeged by these Ministers is that a 1960's house can only have so much done to it; the basic design of the property prevents improvement beyond a certain point without knocking it down and starting again.
I suspect that if there were to be a sensible audit of UK housing stock there will be so many in similar or worse position it would make a mockery of the EPC objective.
I agree with the objective in principle but it must be achievable and there must be clear recognition by the powers that be that in my case my family house gets relatively more expensive to run; my family is worse off. I can only spend the money on one property or the other and it is going to be my family home first.
So NO, I'm selling.
Hamish
JB
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Sign Up11:09 AM, 14th October 2022, About 2 years ago
In the last round of grants I was unable to secure anything for my student properties as they were not on low incomes.
And properties rated EPC D, that I've previously spent money on to raise the EPC, weren't eligible. I'm told they need to require more than one improvement to be eligible. So for properties which already have cavity wall insulation, can't get loft insulation!
Paul Essex
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Sign Up11:20 AM, 14th October 2022, About 2 years ago
As usual a round of stupid comments from well meaning people about how much tenants will save by these measures.
There is NO payback period for a landlord, so the payment for the upgrades requires a rent increase. We would like to recover the cost in a realistic time frame and we are not going to be the source of a ten year interest free loan just for fun. The imposed increase will almost certainly be higher than the minimal sums saved by lower bills.
Overall the tenants will be financially worse off - but this doesn't fit the narrative.
Paul Chetwyn
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Sign Up11:24 AM, 14th October 2022, About 2 years ago
I have already sold the property which would of cost the most (external cladding needed)
I have another 4 needing boilers which I may change on a time scale as required (tenants leaving or 2028)
Or just sell one a year I don’t need the stress and hassle in my life.
I did own and let out 14 properties but now only have 7 left.
Thank you consecutive governments for punishing people who like to look after themselves and not come running to you for handouts (I don’t get it!) it’s as if you don’t want anyone to have anything, so you can control us all perhaps but I don’t know what that gains !
Yours a grumpy landlord who in another life enjoyed being a landlord