Industry body’s key recommendations for Net Zero strategy will be put forward to the Welsh government and beyond.
Landlords must get help if the private rented sector (PRS) in Wales is to decarbonise on an affordable basis, says Propertymark. The industry body has put forward several key recommendations, which will now be considered by the Welsh government. Propertymark’s biggest concern is that all new UK tenancies will be expected to meet an Energy Performance Certificate (EPC) rating of C from April 2025 and existing tenancies by 2028, under current proposals.
However, the organisation has warned that raising the cost cap on work to boost energy ratings would hit many Welsh properties the hardest. The current cap is £3,500, and if a property still fails to meet its EPC target once that has been spent, the owner can apply for an exemption. The UK government is planning to increase the cap to £10,000, which would force landlords to make a significantly bigger outlay. Providing evidence to a Senedd committee, Propertymark pointed out that homes in Wales have some of the lowest property values in the UK, together with low energy efficiency ratings.
EPC LOANS
To level the playing field for landlords and agents operating in Wales, Propertymark recommended that the Development Bank of Wales could offer grants or interest-free loans to landlords to finance improvements. Other incentives could be made through the taxation system, with possible reduced rates of stamp duty, or council tax rebates for both landlords and homeowners. Propertymark has also called for the Welsh government to undertake a communications campaign for tenants, landlords, agents and homeowners to meet its goal of achieving Net Zero.
The industry body believes boosting awareness is more important than ever with the rise in energy bills, and would help mobilise a retrofit revolution.
UNDERPERFORMING
The Senedd committee made a total of 29 recommendations which will go forward to the Welsh government, including a proposal that Rent Smart Wales should have a role in raising awareness of Minimum Energy Efficiency Standards (MEES) among landlords, and identifying underperforming properties in Wales. Timothy Douglas, Head of Policy and Campaigns at Propertymark, said, “we support the Welsh government’s aims of achieving Net Zero and moves to improve the energy efficiency of homes in Wales. We’re really pleased to see that our proposals, such as the availability of interest-free grants for landlords, requests for an agreed timetable and milestones for the sector, the production and inclusion of a clear decarbonisation strategy, alongside calls for the minister to provide clarity on how she will raise awareness, have all been recommended to the Welsh government. We now urge the Welsh government to act upon these recommendations and work with the UK government to introduce policies that allow landlords and homeowners to decarbonise their homes and properties in Wales.”
PROPERTY INDUSTRY CALLS FOR HELP IN BUDGET ON EPC RATINGS
The British Property Federation (BPF) warns that without urgent action, the UK won't hit its 2050 net zero target. The property industry is calling for help in this week’s Budget so property owners and businesses can boost their energy performance certificate (EPC) ratings. The British Property Federation (BPF) is warning that without urgent action, the UK will fail to hit its 2050 net zero target. Now the BPF is urging the Chancellor to act swiftly to remove financial barriers for energy-efficiency upgrades. The organisation says an estimated 58% of properties have an EPC of D or lower in England, with less than a fifth of homeowners planning to improve their property’s energy efficiency.
Landlords are under particular pressure to boost EPC ratings. All new UK tenancies will be expected to meet an EPC rating of C from April 2025. and existing tenancies by 2028, under current proposals. The BPF, which acts as the voice of the property industry, says the government needs to act swiftly to relieve the pressures on those in the residential sector.
ZERO-RATE VAT
The action group is calling on the government to zero-rate VAT on building repairs and maintenance of residential buildings to incentivise essential upgrades. It says the current approach of targeted VAT relief on the installation of energy-saving materials is ineffective, as energy-efficiency improvements are rarely carried out in isolation. The BPF is proposing an alternative form of tax relief for capital expenditure that would provide full tax relief in one year.
It says the government should also introduce an improvement relief on business rates to ensure property owners are not penalised by rate rises as soon as they have carried out improvement works. Melanie Leech, Chief Executive of the British Property Federation, said, “the country’s homeowners and commercial property owners face a real challenge in reaching net zero targets and complying with incoming legislative changes. The government needs to recognise the importance of incentivising energy upgrades across both the commercial and residential property sectors in the Budget. The Chancellor has a clear opportunity to alleviate costs for households and encourage investment in measures that improve a property’s energy efficiency.”