The Government this week scrapped plans aimed at forcing landlords to upgrade the energy efficiency of their properties.
On Wednesday, Rishi Sunak announced the Government would ‘soften’ several green policies, including minimum EPC standards for rental homes.
Although it had not officially become law, for years, landlords have feared these mooted plans that would compel them to upgrade their rental properties to achieve an EPC rating of C by 2028.
Potential new EPC requirements scrapped: There were fears that landlords would be required to upgrade their properties to an EPC of C rating by 2028 in order to let them out
The EPC is a rating scheme which bands properties between A and G, with an A rating being the most energy efficient and G the least efficient.
At present, all rental properties in England and Wales need to have an EPC of at least E in order to be let, unless they are exempt.
This now looks set to remain as the rule for the foreseeable future thanks to a government u-turn earlier this week.
Sunak partly justified scrapping the policy by suggesting that the huge costs of upgrading homes was likely to be passed on as higher rents to tenants.
However, while some government funding will be offered to landlords to upgrade their properties, they will no longer have to fear being fined for not retrofitting their properties.
The potential requirement of having to have an EPC of C to let a property had been looming over landlords for some time. In fact, it was seen as a key reason for some landlords deciding to sell up and exit the sector.
The Prime Minister hosted a press conference on Wednesday and confirmed the government would not be forcing landlords to upgrade the energy efficiency of their properties by 2028
Ben Beadle, chief executive of the National Residential Landlords Association, welcomed the news, which he believes provides much needed clarity.
He said: ‘The uncertainty surrounding energy efficiency policy has been hugely damaging to the supply of rented properties.
‘Landlords are struggling to make investment decisions without a clear idea of the Government’s direction of travel.
‘It is welcome that landlords will not be required to invest substantial sums of money during a cost-of-living crisis when many are themselves struggling financially.
‘However, ministers need to use the space they are creating to develop a full plan that supports the rental market to make the energy efficiency improvements we all want to see.
‘This must include appropriate financial support and reform of the tax system which currently fails to support investment in energy efficiency measures.’
However, not everyone is pleased about this particular change in government policy.
Dawid Baranowski, of property technology firm IMMO believes the impact of EPC regulation on the housing market is a critical factor to ensuring sustainable and affordable living in the future.
He says: ‘Minimum energy standards, while essential for achieving the Paris goals and the UK Net Zero strategy, are also a beacon of hope for consumers as they reduce cost burdens and contribute to the decarbonisation of real estate.
‘The fact the government is making a u-turn on these standards which have been in the public domain for years is disheartening, as the brunt of such a decision fall on renters, who are often not landowners and will absorb the burden of the higher energy bills, especially at a time when we are grappling with a cost-of-living crisis.
‘More than 2.4 million privately rented homes in England will experience higher energy bills with renters facing £1.4 billion costs as a result.’
Ben Beadle, chief executive of the National Residential Landlords Association, welcomed the news, which he believes provides some much needed clarity for the sector
Dan Wilson Craw, deputy chief executive of Generation Rent also bemoaned what he described as a colossal error by the Government.
He adds: ‘Leaving the impact on the climate to one side, it makes the cost of living crisis worse and damages renters’ health.
‘One in four private renters lives in fuel poverty and, without targets for landlords to improve their properties, they face many more years of unaffordable bills.
‘Energy efficiency is also an essential part of a home’s quality. Backtracking leaves the Government’s levelling up mission to halve the number of non-decent rented homes in shreds.
‘Both tenants and landlords need support to upgrade private rented homes, and the Prime Minister recognised that ‘big government grants’ help make it affordable. But without higher standards, landlords have no reason to accept tenants’ requests for improvements.’
