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Category: epc
A top landlord mortgage lender, Paragon Bank, has weighed into the discussion surrounding the government’s energy performance targets.
Labour are currently sticking to their deadline for all private rental sector (PRS) properties to reach a ‘C’ grade or higher on their Energy Performance Certificates (EPC) by 2030.
Paragon argue that this is nowhere near enough time for most private landlords to make the necessary changes. Hastily-done renovations could also reduce the overall quality of their properties and drive down demand.
They also said that more landlords could sell up in response to the stricter EPC criteria, thereby increasing shortages in rental properties.
A staggered approach?
Paragon have put forward a more phased approach to implementing new EPC targets, which they feel would be more achievable for landlords and less disruptive for the market.
Technically, Labour already have a somewhat staggered target: they want all new tenancies to meet the EPC criteria by 2028, then for all other tenancies to follow suit by 2030.
However, Paragon believe that staggering it further across three key categories of tenancies would be more feasible.
According to the lender, 2030 should be the deadline for new tenancies to meet a C grade. Then, some extra time should be given for extended tenancies to catch up, giving them until 2033. Finally, all other tenancies would need to meet the new criteria by an ultimate deadline of 2035.
A country stretched too thin
Making every private property in the UK more energy efficient is only one of several costly, ambitious objectives for the wider housing market pursued by the current government.
On top of this, there is the problem of Labour’s housebuilding goals. Many have criticised their targets as outright impossible to achieve, requiring 149 new homes built per hour. Construction firms are being stretched to their absolute limit to meet these expectations and there are fears that construction quality will also suffer.
With Labour’s overriding focus on building new homes, and 60% of PRS properties in England and Wales currently graded at D or below on their EPCs, the country does not have working capacity to meet the EPC targets, Paragon claim.
To meet the ultimate 2030 EPC target, 2,000 PRS properties would have to be retrofitted each day. 4,000 would need this treatment to meet the 2028 target.
On paper, there is a noble goal behind Labour’s directives to “Get Britain Building” and to improve energy efficiency in PRS properties – they want warm, safe homes to be standardised for everyone. However, according to Paragon, the unrealistic targets risk alienating large portions of the housing market.
Regional differences have also not been taken into account, the lender argues. The north of England naturally experiences harsher winters and milder summers, with a larger portion of properties in northern regions grading below C on their EPCs. But properties in these colder regions are currently tarred with the same brush as those in warmer, southern areas.
Lastly, Paragon have suggested that Labour change the maximum investment cap to £10,000 and seven-year exemption, which was part of the government’s original proposal.
Time will tell if Labour decide to temper their goals for the housing market, but the prospect of lenders representing the concerns of private landlords in this debate may offer some hope.
