This information should not be interpreted as financial, tax or legal advice. Mortgage and loan rates are subject to change.
Categories: epc | government and politics
A spokesperson from a leading mortgage lender has backed up landlords in their pleas for government support to meet Labour’s Energy Performance Certificate (EPC) targets.
In parliament, the Secretary of State for Energy Security and former Labour leader Ed Miliband answered questions about the government’s EPC targets. Though there was some confusion about whether Labour planned to keep the EPC assessment system at all, latest reports prove that the status quo remains in place.
Labour’s goal is for all properties in the Private Rented Sector (PRS) to meet a ‘C’ rating or above by 2030.
Charlotte Harrison, chief executive of Skipton Group, has called for Chancellor Rachel Reeves to offer support to landlords, given the potential costs involved.
Landlords play an integral part in the UK’s housing provision, and we know they face significant challenges in greening their homes from an awareness, cost, and access to appropriate guidance and skills perspective.
“We believe that when it comes to the decarbonisation of our housing stock, the Government needs to consider ways to incentivise and support landlords in forthcoming Budgets to enable them to reach the new proposed target.
“Making the necessary improvements to their properties is critical to helping the country meet its net zero target and, importantly, will help to address some of the challenges that the cost-of-living, energy and climate crises have had on people living in the UK.
“To date, there have been more incentives for homeowners and social tenants to green their homes than there have been for landlords, offering an opportunity for this Government to equalise that imbalance.
The costs of energy performance upgrades
When pushing forward with their net zero targets, Labour will be forced to consider the 2.7 million rental properties that will need refurbishment to meet the required ‘C’ rating.
Regardless of rental income, affordability is a major issue here. Many PRS landlords find the upfront costs of energy performance upgrades too expensive to justify, even with loans to help them out. Last year, 35% of landlords did not make any such upgrades because they were too costly, according to one survey.
A large portion of below-C properties lose energy because their infrastructure is too old and was never built with energy efficiency in mind.
For these older properties with ratings of ‘E’ or below, it can cost over £14,000 to fully refurbish them to meet modern standards. Many landlords may feel pressured to sell these properties, rather than incur such high costs.
The Autumn Budget
The forthcoming budget that Harrison mentions is upcoming in October (a.k.a. the Autumn Budget). Alas, few are seriously expecting a clause offering landlords vast sums to boost their properties’ energy performance.
Instead, there are rumours of a capital gains tax rise, which would be less-than-welcome news for buy to let landlords.
Rachel Reeves has already confirmed that tax rises will be included in the Autumn Budget, but what exactly they will be is hard to predict with certainty. When asked about this in an interview with The News Agents podcast, she refused to rule out the possibility of increases to capital gains tax and inheritance tax, both being the source of much speculation.
Time will tell if Labour make any concessions for PRS landlords so that all housing sectors feel incentive to make their properties greener.
