No More Uncertainty About EPCs (Energy Performance Certificate)
The government has made a significant policy reversal regarding its previously announced intention to raise Minimum Energy Efficiency Standards to an EPC C level within the private rental sector.
Initially, after the announcement, minimal additional information was provided. This lack of clarity made it difficult for landlords to make informed plans, especially without a legally mandated deadline or any accompanying financial assistance.
However, in July, there were initial hints that the government might be reconsidering its stance. Housing Secretary Michael Gove stated, “I believe we may be imposing excessive demands on landlords, and as a result, we will grant them more time.”
Now, Prime Minister Rishi Sunak has officially confirmed that the plans to compel landlords to upgrade will be abandoned.
This decision comes as a relief to landlords who were facing potential costs of up to £10,000 to meet the required energy efficiency standards, especially given the limited support that had been proposed.
Properties with high EPC ratings are already garnering attention from buy-to-let investors. This change in policy is expected to encourage landlords to recognize the long-term advantages of energy-efficient properties, while retaining the flexibility to carry out upgrades on their own schedules.
A New Call to Action: Mortgage Interest Rate Stability
High mortgage rates have been a major concern for landlords, with 44.2% of those surveyed in our State of the Lettings Industry Report 2023 indicating that it is a significant factor prompting landlords to leave the sector.
Although the recent decision to freeze the interest base rate was not made explicitly for the benefit of landlords, it does provide some relief for property owners who have been grappling with rising costs.
While this freeze does not guarantee that rates will not increase in the future, the unexpected dip in inflation offers hope that rate hikes may soon reach their peak.
Delays in Rental Reform
Lastly, there is the Renters (Reform) Bill, which is awaiting its second reading as it progresses through the legislative process toward Royal Assent.
However, the delay is linked to Conservative party whips who are also landlords. According to reports, these individuals are raising concerns among Tory MPs and slowing down the bill’s progress.
While there are numerous ways to address landlords’ concerns regarding impending changes, it remains to be seen whether these landlord representatives within the government will influence the final version of the bill when it eventually becomes law.
The information in this post is valid to the best of our knowledge on the date of posting. It is advised that you seek independent advice based on your individual circumstances.
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