Official dithering over EPC reforms damaging rental market
Fisher German says landlords may need to spend thousands on their property portfolios to meet the energy efficiency targets so need certainty.
More certainty is needed over new Energy Performance Certificate (EPC) regulations before smaller landlords with just a handful of properties start to sell sell up, property consultancy Fisher German warns.
The Neg reported last month how Housing Secretary Michael Gove said landlords must be given more time to achieve the minimum EPC rating, claiming that they are putting unrealistic pressures on landlords.
SPEND THOUSANDS
Neil Hogbin, Partner at Fisher German’s property management team, reckons landlords, particulary those with older properties, may need to spend thousands of pounds on their property portfolios to meet the energy efficiency targets so need certainty around any potential reforms.
He says: “Combined with the increase in energy prices because of the war in Ukraine, there is a further threat that rents will continue to rise to cover some of the costs of the EPC improvements being forced upon private landlords as they scramble to meet the new energy efficiency targets being set.”
And he adds: “Decent homes in the private rented sector will no longer be affordable to many. We all want to see properties as energy efficient as possible but the sector needs certainty about how and when this will happen.
“Landlords are looking for a financial package to support improvements in the private rented sector but it is all still very unclear. Meanwhile, the owner-occupied housing sector has no minimum energy efficiency requirements at all.”
NOT PRACTICAL
Hogbin says many of the EPC changes are simply ‘not practical, affordable or wanted by many tenants’ and that it’s unfair that the private sector landlords should have to deliver on EPC targets ahead of other housing market sectors.
He adds: “They are already taking steps to be more environmentally conscious with low-carbon heating systems and well-insulated homes where sensible and cost-effective to do so and shouldn’t need to be regulated to deliver on this.
“Smaller landlords with just a handful of properties may sell up.”
I have an EPC for a stone built cottage dating from around 1850 where if the landlord spends £42,000 on improvements the tenant will save £2400 per year on energy costs according tot he EPC. That would be impressive except that the tenant only spends £1750 per year now so does that mean he is entitled to free energy going forward and £650 from HMG. In short the EPCs are not fit for purpose on all too many properties.
The real puzzle is why they think that landlords spending thousands on 10 to 12% of the housing stock then increasing rents to cover the cost will benefit either the planet or the tenant the maths do not add up.