Ed Miliband’s EPC targets for landlords are set to drive the UK’s property
market into a ‘frenzy’ which could worsen the housing crisis, experts have
warned.
The government has initiated a consultation to overhaul energy performance
certificates (EPCs) for homes in the private rented sector needing to reach
an EPC rating of C by 2030.
The proposal will force landlords to either
renovate properties or sell them.
Mr Miliband described it as a ‘Tory scandal’ that tenants still endure
‘cold draughty homes’.
Driven many investors out
Speaking to the
Daily Telegraph
, Ryan Etchells, from property management company Together, highlighted
that the previous government’s policies had already driven many investors
out of the market.
He also points to the severe shortage of tradespeople to carry out the work
– a crisis the government has not addressed in its reforms.
Mr Etchells told the newspaper: “It’s been like the hokey cokey over the
last few years for landlords. But if we’re not careful it could become a
frenzy.
“There simply won’t be enough tradespeople to make improvements.”
Landlords are accelerating their plans to divest
Mr Etchells added that many landlords are accelerating their plans to sell
due to the looming EPC deadline, potentially leading to an oversupply of
ex-rentals on the market.
He also warns that homes with low-rated EPCs could be seen by mortgage
lenders as a non-standard property making it harder to get a loan.
Currently, the minimum energy efficiency standard requires an E-rated EPC,
but new metrics may introduce an entirely new standard.
Amy Cushing, from law firm Moore Barlow, told the Telegraph: “As it stands,
the consultation does not go into detail as to what the thresholds would be
for each metric, so landlords do not know what standards their properties
will need to meet.”
Criticised for their unreliability
EPCs have been criticised for their unreliability and inconsistent
assessments – an issue highlighted by Tom Garrigan.
He works for the Building Services Research and Information Association,
and he said that several EPC assessors carrying out an assessment of the
same property would probably deliver different results.
The government announced last week that it is seeking views to improve the
quality of EPCs to boost trustworthiness, reliability and accuracy.
However, Mr Garrigan pointed out that if assessors can’t determine the
insulation quality by checking inside a wall, then ratings will be assumed.
Render some properties unlettable
The Telegraph also spoke with Scott Battram, from legal firm Hunters Law,
who warned that a sudden shift in metrics could see some landlord
properties being ‘unlettable’.
He also fears that changing EPC criteria that prioritise green equipment,
such as air-source heat pumps and solar panels, will affect those landlords
who have already invested in EPC upgrades.
A government spokesman said: “Everyone should live in a warm, safe home.
“Our plans for private and social rented homes to achieve energy
performance certificate C or equivalent by 2030 will help deliver
cheaper-to-heat homes while lifting up to one million households out of
fuel poverty through the biggest potential boost to home energy standards in
history.”
Energy efficiency standards for the PRS
The government’s announcement made clear it will launch a public
consultation on new energy efficiency standards for PRS homes.
This move follows months of delay since the initial announcement last
September.
Energy Minister Miatta Fahnbulleh confirmed the move in a written
statement.
She stated: “The government will soon consult on increasing minimum energy
efficiency standards in the domestic private rented sector.
“The consultation will include proposals for rented homes to achieve an
Energy Performance Certificate C or equivalent by 2030.
“We will also outline proposals for exemptions for properties that may not
be able to meet the proposed increased standard.
“We encourage landlords and other key stakeholders to actively participate
in this consultation when it is published.”
EPC targets for landlords
Simon Thompson, the managing director of Accommodation for Landlords, said:
“The proposed EPC targets for landlords have sparked concern among many
landlords and property experts.
“The ambitious goal of achieving an EPC rating of C for all rental
properties by 2030 could lead to a chaotic property market and exacerbate
the housing shortage.
“Landlords face the daunting task of either renovating their properties to
meet the new standards or selling them, potentially flooding the market
with ex-rentals.”
He added: “Landlords are already under immense pressure with existing
regulations and these new targets without addressing the shortage of
tradespeople and the costs involved could push many out of the market.”
