Rayner's landlord crackdown risks costing property owners £18,000

Yahoo

13-02-2025

Landlords across England and Wales risk incurring bills of up to £18,000 to upgrade their properties in the face of new energy efficiency standards championed by Angela Rayner.
Property owners renting out homes will need to spend an average of £8,148 on improvements, according to an assessment of more than 31,000 properties by Knight Frank using CoreLogic data. In some cases, the bills will be far higher.
Ms Rayner, the Housing Secretary, and Ed Miliband, the Energy Secretary, last week said that energy performance certificates (EPCs) for all privately rented homes should reach a minimum 'C' rating by 2030.
It means millions of landlords will have to pay for costly upgrades such as extra insulation, or else face a ban on renting.
Around 60pc of the 5m households in the private rented sector are rated EPC D or below. Researchers said the total bill for carrying out improvements could reach £21.6bn – a cost equal to more than five years' worth of annual rent.
Private landlords with an EPC D rating would typically need to spend £5,841 on improving their homes to a C rating.
The most inefficient properties, those with a rating below E, cannot be rented out. However, the cost of making these houses compliant with the new regulations will be even higher when the minimum EPC rating is increased.
In the worst case, the research suggests that it would cost £18,174 to lift a G-rated property up to a C.
The Government is consulting on the new rules. It is considering a £15,000 cap on costs for landlords, as well as a possible lower cap of £10,000 for properties charging lower rents or in lower council tax bands, which would limit the impact of the changes. The Government's boiler upgrade scheme also offers grants of up to £7,500 to help mitigate costs.
The Government's own estimate of the average cost to landlords is between £6,100 and £6,800 by 2030.
Gary Hall, the head of lettings at Knight Frank, said: 'Landlords are consistently tackling a series of evolving requirements from the Government. Many are not making a profit on their rental property, making it challenging to fund substantial improvements without clear guidance on implementation options and financial support.
'To make meaningful progress in improving energy efficiency, landlords need assurance from the Government that there will be grants available and a cap on the amount they will be required to spend. Introducing tax breaks for energy efficiency improvements would be a great way to support landlords and in turn, help the Government achieve its targets.
'Bringing homes up to a good EPC level is in everyone's best interests, but it can't be at the detriment of the number of available properties on the rental market, which is reducing yearly. We must encourage investment in this sector, not force landlords to sell due to further margin erosion.'
Chris Norris, of the National Residential Landlords Association, warned that the Government's plans were impossible to deliver, estimating that 2,000 private rented properties will require improvement to meet the new benchmark every working day between July this year and December 2029.
Mr Norris said: 'That is simply not feasible, not least given the shortage of tradespeople to carry out the work that many rental properties require. The sector needs 10 years if we are going to achieve the ambitions being consulted on.'
He added that ministers need to avoid creating a north-south divide. He said a landlord in Burnley, where average house prices are just under £120,000, would have significantly less capital to invest in energy efficiency works than a landlord in Kensington and Chelsea, where average house prices exceed £1m.
Mr Norris said: 'We all want rented homes to be as energy efficient as possible. However, that's not going to happen without a realistic plan to deliver on this objective. At present, there simply isn't one in place.
'Ministers need to develop a targeted financial package to support investment in the work required, as the Committee on Fuel Poverty and Citizens Advice has previously recommended. This could include using the tax system to encourage landlords to make energy efficiency improvements to their rental properties.'
A Department for Energy Security and Net Zero spokesman said: 'We reject this analysis. Our own findings suggest an average cost to private landlords of around £6,500 per property.
'Everyone deserves to live in a warm, comfortable home and around half of private landlords are already ensuring this.
'We are consulting to make sure the views of renters, landlords and the retrofit industry inform our plans.'
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