Energy efficiency targets cause concern
- Published: Tuesday 13 April, 2021
- By: Commercial Trust
The Lettings Industry Council (TLIC) has written to the Ministry of Housing, Communities and Local Government highlighting that plans to increase minimum energy ratings for rental properties are unrealistic in some cases.
TLIC was set up in 2015 and looks at issues across the sector, including government legislation and proposals.
The letter, signed by a number of lettings agents hopes to extend the timeframe that is in place to achieve a minimum C rating.
The letter opens with a reassurance that the collective signees agree that action must be taken to address the climate issue, but that the timeline isn’t feasible.
“We welcome government taking action to improve energy efficiency in privately rented homes and fully support the need to improve our carbon footprint. However we would like to communicate the issues we foresee with the proposal set out in the consultation and offer our thoughts on an alternative solution”.
Timeframe too short
The letter from TLIC explains that the timeframe doesn’t take into account recovery time from the financial hardship caused by Covid-19.
They are warning that landlords may decide to sell, to avoid the pressure of investing substantial amounts into their properties, to meet the requirements.
The letter goes on to discuss the importance of the PRS in housing the nation.
“Stock levels outside of London are already low in the Private Rented Sector and we run the risk of more landlords exiting the market as further legislative pressures are added.”
“With no information on how or when owner occupiers will need to comply with these energy efficiency requirements, more landlords may decide to sell to avoid the pressure of having to spend additional money on their properties. This could lead to a rise in homelessness if tenants are not able to purchase a property themselves”
The council has set out an alternative proposal of timescale:
By April 2026:
All new and renewed tenancies to have a minimum of D rating which is the average rating for all homes.
By April 2028:
All existing tenancies to have a minimum of D rating and all new and renewed tenancies to have a minimum of C rating
By January 2030:
All existing tenancies to have a minimum of C rating.
The sentiment in the landlord community mirrors that of the TLIC’s, with many concerned about the implications of not meeting the required rating in time or being able to meet it at all.
Others have expressed concern about being “backed into a corner” having to choose between investing to reach higher EPC ratings or facing Capital Gains Tax charges from selling up.
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.