The government will this week announce a new consultation on private rental sector energy efficiency - in particular, insulation.
This will be part of a revamped net zero strategy which will be launched on Thursday when Prime Minister Rishi Sunak visits the UK’s oil and gas capital, Aberdeen. The Guardian, which carried leaks of the government proposals, says the initiative is to be called Energy Security Day and will focus on measures to improve the country’s infrastructure.
The newspaper says there will be no compulsion on housebuilders to fit rooftop solar to new housing, as some have advocated. Nor will there be a comprehensive nationwide programme for insulation of the UK’s housing stock. “Instead, the strongest insulation measure is likely to be a consultation on the private rented sector” it claims.
Green measures in the strategy will include an expansion of renewable energy, including offshore and onshore wind, plans to produce green hydrogen, and a drive to improve sales of electric vehicles and heat pumps. There will also be bigger roles for carbon capture and storage technology plus the possible licensing of a massive new oilfield, Rosebank.
Activist group Generation Rent has already started rubbishing the government’s moves, with deputy director Dan Wilson Craw tweeting over the weekend, “this is alarming. We’ve already had a consultation on energy efficiency in the private rental sector 2.5 years ago which the government hasn’t even responded to.”
The energy efficiency issue is of critical importance to the lettings industry because the government has pledged to reduce energy consumption from buildings and industry 15% by 2030, with aspirations for properties to have a minimum EPC rating of C in England and Wales by April 2025. Under current government regulation, landlords are not expected to spend more than £3,500 on upgrades to meet the current EPC requirements for a rating of E.
However, proposed changes could see all rental properties requiring an EPC rating of C by 2028, and a potential increase to this cap to £10,000, meaning landlords could be required to spend more to meet minimum requirements.
Landlords ‘given longer’ to meet deadline for EPC changes
A new target date of 2028 for landlords to achieve an EPC C rating has been set by the Government, according to the Daily Telegraph. Landlords are set to be given an extra three years to meet the Government’s EPC rating targets, it has been reported.
It appears ministers have listened to lettings industry leaders warning that a deadline of 2025 was unrealistic. Now, the deadline for new lettings to have a minimum C rating is going to be 2028, and this date will apply to all lettings, according to the Daily Telegraph. Previously, reported warnings that landlords will be forced out of the market, especially when faced with fines of up to £30,000 for non-complicance.
Jason Davies, owner of Davies Properties based in Keighley, West Yorkshire, predicted a “mass exodus of landlords” from PRS if the Government stuck to its original plans. Trade body Propertymark and the NRLA suggested the 2025 target date was unworkable, and had lobbied the Government hard to make it later.
A maximum spend cap for landlords making improvements to properties is expected to be set at £10,000.
Rik Smith, head of tenancy services at rent guarantee platform Goodlord, said, “I’m sure the market will welcome the proposed extended deadline to get properties up to standard, but there’s an enormous amount to do before then. Landlords across the market are already feeling pressure on many fronts, including rising mortgage rates, so we don’t want a lack of required infrastructure or not fit-for-purpose guidelines to lead them into leaving the sector.”
Tom Goodman, MD at tenant referencing service Vouch, said, “the last thing the sector needs is another push factor encouraging landlords to sell-up – there is already too tight a squeeze on rental stock. “What we need now is a balanced and supportive approach from the Government on next steps, so that landlords are incentivised to make these upgrades and can afford them.”