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The Independent
2 days ago
- Business
- The Independent
Landlords say homes energy efficiency schedule is ‘detached from reality'
The Government's plan to improve the energy efficiency of all private rented homes is 'detached from reality', landlords have warned. The proposed timeframe for requiring all properties to meet a higher efficiency rating is 'simply unrealistic' largely due to a shortage of tradespeople to carry out the work, the National Residential Landlords Association (NRLA) said. The Government's consultation on the plan, which aims to cut bills and emissions to deliver a statutory fuel poverty target, closed last month. It proposes that all privately rented properties must meet a minimum efficiency standard C, rather than the current required rating of E, by 2030. The NRLA said that while landlords support the overall objective, the Government must rethink its implementation process. Under the Government's current timeline, the new minimum efficiency standard, which will be set against new metrics, will be confirmed in late 2026, with a view to it applying to all new tenancies by 2028 – and all tenancies by 2030. The NRLA said this could give landlords less than two years to upgrade more than 2.5 million rented homes that it estimates do not currently meet the new energy performance standard. It also said ministers have not explained how the 'extensive' works will be funded. In its response to the consultation, the NRLA cited research by the Kingfisher group, the owner of brands such as Screwfix, B&Q and Tradepoint, which estimated there will be a shortfall of 250,000 skilled tradespeople in the UK by 2030. The NRLA proposed an adjusted implementation plan which requires landlords to meet specified standards relating to the fabric of the building, such as improved insulation, by 2030. All landlords should then meet secondary standards relating to smart meters and efficient heating systems by 2036, it said. NRLA chief executive Ben Beadle said: 'We want all private rented properties to be as energy efficient as possible. However, tenants are being sold a pup with timelines that are hopelessly unrealistic. 'The idea that millions of homes can be retrofitted in less than two years is detached from all reality, not least given the chronic shortage of tradespeople the sector needs to get the work done. 'Noble ambitions mean little without practical and realistic policy to match.' In its annual report in 2024, the advisory Committee on Fuel Poverty said: ' Failure to make rapid progress in the private rented sector on energy efficiency will fundamentally undermine any Government strategy to end fuel poverty.' A spokesperson for the Department for Energy Security and Net Zero said: 'Everyone deserves to live in a warm home, which is why we have recently consulted on plans to require private landlords to meet higher energy performance standards. 'These plans could lift up to half a million households out of fuel poverty by 2030, while also making renters hundreds of pounds better off. 'We have also announced plans to train up to 18,000 skilled workers to install heat pumps, fit solar panels, install insulation and work on heat networks.'
Yahoo
2 days ago
- Business
- Yahoo
Rents to surge £900 to pay for Labour reforms
Are you a landlord planning to raise rents because of the reforms? Get in touch money@ Labour's rent reforms will add almost £900 a year to the average tenancy, a report has warned. Nearly half of Britain's buy-to-let landlords (44pc) plan to increase rents in response to the controversial Renters' Rights Bill, according to research by housing lender Landbay. The landmark legislation, due to kick in this autumn, will limit landlords to just one rent increase per year capped at the 'market rate' – the price that would be achieved if the property was newly advertised to let. Landbay said property owners were planning to increase rent by an average of 6pc, which would add £74 to the average monthly rent, or £888 a year. The survey also found that the majority of landlords (89pc) intended to raise rents in the next 12 months. More than a third (40pc) planned to increase rents by 3pc or more over the next 12 months, while over one in 10 (11pc) said they did not intend to put up rents at all. The Renters' Rights Bill will introduce new protections and rights for the 11 million private tenants in England by reforming the current system of renting. An end to fixed-term tenancies, longer notice periods, and restrictions on rent increases will give tenants more rights and landlords less control over how they manage their property and buy-to-let business. The bill is currently being scrutinised in the House of Lords. The Government aims for the reforms to receive Royal Assent by summer 2025, with implementation expected between October and December this year. The National Residential Landlords Association (NRLA) argued that the bill could force landlords out of the sector and push up rents if it is passed in its current form. Chris Norris, of the NRLA, said the 6pc rent increase figure was consistent with the NRLA's estimates that the Renters' Rights Bill would trigger rent rises of 3pc to 4pc above inflation. He added: '[The bill] is likely to affect tenants directly in many more ways than landlords. 'You have the prospect of tenancies becoming more risky, harder to end – and you have to wait longer to claw back arrears. 'Landlords will be pricing in that risk when setting rents.' A recent survey by Pegasus Insight showed that 37pc of landlords planned to sell a property in the next 12 months while just 6pc said they intended to buy. Rents in England rose by 1pc in May to £1,226, the highest level since October 2024, according to letting agent software firm Goodlord's rental index. William Reeve, Goodlord's chief executive, said: 'Although the pace of year-on-year increases is starting to slow… ongoing supply issues coupled with landlord jitters ahead of the Renters' Rights Bill means that rents remain on track to rise for the foreseeable future.' The Government was approached for comment. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
26-05-2025
- Business
- Telegraph
Renters Rights Bill: When will it become law?
Tenants who rent in the private sector are on the cusp of receiving greater protections from eviction, unfair rent increases and greater stability of tenure as the Renters' Rights Bill makes its way through parliament. The controversial body of legislation is the biggest change to renting in over 30 years according to industry body The National Residential Landlords Association (NRLA) which is battling to get some of the proposals changed to soften the blow for the buy-to-let sector. Here Telegraph Money explains the measures laid out in the bill, what that means for landlords and when it is likely to become law. What is the Renters' Rights Bill? The Renters' Rights Bill, which builds on the Renters' Reform Bill introduced by the Conservatives, will introduce new protections and rights for the 11 million private tenants in England by reforming the current system of renting. An end to fixed-term tenancies, longer notice periods to give renters more time to find a new home and restrictions on rent increases will give tenants more rights and landlords less control over how they manage their property and buy-to-let business. Labour says it will 'transform the experience of private renting' which will largely be achieved by ending Section 21 evictions dubbed 'no-fault evictions'. If the bill is passed in its current form, the NRLA argues that it could force landlords out of the sector – reinforced by a survey last month by Pegasus Insight which revealed 37pc of landlords planned to sell a property in the next 12 months while just 6pc said they intended to buy. New rules in the Renters' Rights Bill Evictions and serving notice: Section 21 no-fault evictions will be abolished. Fixed-term tenancies will be replaced with periodic tenancies, also known as rolling contracts that don't have an end date. Tenants will have a 12-month protected period at the start of their tenancy preventing landlords from forcing evictions to move back in or sell. Tenants can serve two months' notice to quit the property at any time. Landlords must serve four months' notice when moving back in or selling to give tenants time to find a suitable home. Landlords will not be able to evict a tenant in arrears until three months' payment have been missed, up from two months while the notice period has been increased from two to four weeks. Prices and payment: Rent increases are limited to once a year and only to the market rate which can be challenged by tenants at the first-tier tribunal if they believe it is excessive. Increases cannot be backdated. Large amounts of rent cannot be demanded in advance of a tenancy starting. Landlords must register with a digital database, failing to do so means that they cannot use certain grounds of possession. Asking rents must be published to prevent bidding wars making it illegal for landlords to accept offers higher than the rent advertised. Standards and safety: The Decent Homes Standard and Awaab's Law, currently applicable to homes in the social housing sector, will be extended to private sector landlords to ensure homes are made safe, are of good value and good quality. A private rented sector landlord ombudsman will be set up to provide an impartial and binding resolution for tenant complaints against landlords. Discrimination: Strengthened rights for tenants to have pets, although landlords can insist on pet insurance to cover any damage to their property. End discrimination against tenants on benefits or with children. Compliance: Councils will have the power to issue civil penalties of up to £7,000 to landlords who don't comply with the reforms rising to £40,000 for a serious breach or repeat non-compliance with the law. More strength will be given to rent repayment orders that can be issued by councils when landlords breach the law. What does the new renters' bill mean for landlords? Sylvie Harris, of property consultancy INHOUS, said: 'Through the abolition of Section 21 no-fault evictions, landlords will only be able to end tenancies using specific grounds under Section 8, such as rent arrears or anti-social behaviour or if they intend to sell or move into the property.' For the latter, an extended four-month notice period must be served. But the pressure this will place on a court system, which Matthew Pennycook, the housing minister, acknowledged during a parliamentary debate was 'on its knees', is raising concerns and has led to an amendment being tabled to review the impact of this plan on the legal system. When the Conservative government brought forward its draft renters rights legislation, then-minister Michael Gove said that the right to make no-fault evictions would remain in place until a full review of the courts had been completed. Currently, the average time between a landlord submitting a claim for an eviction and regaining possession of their property is more than seven months. In response to the Government's claims that the courts will be ready for the impact of the bill, Ben Beadle, chief executive of the NRLA, said: 'Seven months is an eternity for responsible landlords who may be dealing with serious rent arrears and for neighbours having to endure anti-social behaviour.' Not only could it take longer to evict a tenant, landlords will have to endure greater levels of arrears before they apply for possession as the minimum level of arrears for eviction is bumped up from two to three months. Landlords operating in the student let sector could also face challenges in operating their businesses efficiently if the legislation is implemented in its current form. Ending fixed-term tenancies removes the certainty for these landlords that their property will be available to let to a new batch of students when the academic year begins. Although grounds for possession have been included which allows landlords of houses in multiple occupation (HMOs) to evict last year's students to make way for a new group, one and two-bedroom student flats were not mentioned. Banning the receipt of large sums of rent upfront, meanwhile, could put landlords off renting to international students or tenants who have had credit difficulties in the past or do not pass affordability assessments. Without the security of payment in advance, these groups may struggle to be accepted. As the bill continues to undergo scrutiny, amendments to some of the measures may still be made. 'Reforms are still being actively debated and could change,' said Adam Jennings, of Chestertons. 'For example, 12-month fixed tenancies are still under discussion, with some stakeholders advocating for flexibility in terms of tenancy lengths. 'Another potential area for change involves the student housing market. The current restrictions on upfront rent payments are problematic for international students, and there's a push to either exempt certain categories of tenants or find alternative solutions.' Other amendments from the House of Lords include clarifications on the new grounds for possession and adjustments to notice periods. When will the bill become law? The bill is currently undergoing scrutiny in the House of Lords with the committee stage having commenced on April 22 2025. Although there is no definite date yet, Ms Harris says the Government aims for the bill to receive Royal Assent by summer 2025, with implementation expected between October and December 2025. The plan is to implement the changes to tenancies in one go rather than create a two-tier system that applies the rules to new and existing tenancies at different times.
Telegraph
15-05-2025
- Business
- Telegraph
Reeves urged to launch tax raid on landlords (and the three ways she could do it)
Rachel Reeves is under pressure from Labour politicians to launch a fresh tax raid on landlords, reports suggest. Nick Williams, a former No 10 aide, on Thursday warned taxes would 'have to go up' as the Chancellor seeks to fill a fiscal black hole. Labour MPs are said to be keen on increasing the amount landlords pay on rental income, The Times reported. The move would allow the party to escape breaking its manifesto pledge of not raising taxes on 'working people' – after Sir Keir Starmer suggested landlords did not meet the definition. Tax experts told The Telegraph that Ms Reeves could force landlords to pay National Insurance on their rental income, introduce a separate tax band for rental income or levy VAT on residential property lettings. But Chris Norris, of the National Residential Landlords Association (NRLA), pointed out that landlords already paid income tax on rental income. He warned further taxes would 'increase complexity, dissuade investment and risk deepening the housing crisis'. He added: 'Rumours concerning the imposition of a 'rental income tax' are misleading as they suggest that such income is not already taxed just like all other personal and business income.' At present, landlords do not pay National Insurance because the earnings are treated as passive income rather than from employment or self-employment. Workers meanwhile must pay 8pc of their income in National Insurance contributions. Last year the Resolution Foundation think tank said income tax rates on rental income should be supplemented with a 'new class' of National Insurance to 'ensure more consistent tax rates across different types of income'. Tulip Siddiq, the former City minister, has also previously called for 'unearned income' such as rent on buy-to-let properties to be taxed more in line with wages. Telegraph Money has looked at three ways Ms Reeves could launch a raid on property investors: Charging National Insurance on rental income Robert Salter, of tax advisory firm, Blick Rothenberg, said one option for Ms Reeves would be to make the profit from letting income subject to National Insurance contributions in line with self-employed workers. Self-employed National Insurance rates depend on the profit earned. Workers pay 6pc on profits earned between £12,570 and £50,270 and then 2pc on any profits above this amount. For those with profits below £6,725 a year, self-employed workers do not have to pay National Insurance but can choose to pay voluntary contributions. However, Ian Cook, chartered financial planner at Quilter, said levying National Insurance on landlords could be too difficult to implement because workers stop paying it once they reach state pension age. For self-employed workers, they also stop paying class 4 contributions from the following April after they reach 66 years old. The median age of individual landlords is 58 years old, according to government figures. Mr Cook said it would involve the government breaking with convention to levy National Insurance on landlords above this age or create a two-tier policy whereby some landlords were charged and others were not – both outcomes he described as 'complicated'. Creating a new income tax band for landlords Mr Cook said a simpler solution for Ms Reeves would be to create a separate tax rate for rental income. The first £1,000 of rental income earned from property is tax-free. This is known as the property allowance. Tax is then charged depending on what band of income you fall into. For example if a landlord earns £45,000 a year from their day job and earns a further £8,000 in rental income, the first £5,271 is taxed at the 20pc basic rate and the remaining £1,729 falls under 40pc higher rate. However Mr Cook said accountants have been 'very creative in the past with how they have allocated property income for husband and wife owners '. He said: 'Even if a property is jointly owned, you can allocate 99pc of the rental income to the person who benefits from a tax perspective. Effectively some landlords therefore don't pay any income tax because if one partner does not work, the income can fall within their personal allowance.' Mr Cook said Labour could close off this option by introducing a separate tax band for rental income. 'This could be quite easily implemented into HM Revenue and Custom's tax system and would raise a significant amount of tax revenue for the Treasury'. Levying VAT on residential properties Mr Salter said another option Ms Reeves could consider is introducing VAT on residential property lettings. There is precedent for the Chancellor to do this with VAT already being applied to furnished holiday lettings and serviced accommodation. However Mr Salter said a 20pc levy would come with significant drawbacks for renters with the cost inevitably being passed on, pushing up prices. He said: 'Introducing VAT on regular residential property lettings would clearly result in significant rental property inflation and be a real cost which is borne by tenants.' Polling by YouGov at the last General Election found four in 10 renters voted for Sir Keir's party last summer. Mr Salter added that while this policy would have the clearest impact on pushing up the price of rental accommodation, all of these policies suggested were not without their pitfalls and could put pressure on rental inflation as an unintended consequence. Mr Norris, chief policy officer at the NRLA, said: 'Since 2015, landlords have faced a series of punitive tax and regulatory changes, such as the removal of mortgage interest relief and the introduction and subsequent hiking of the stamp duty levy on additional properties. 'These changes have significantly impacted investment in the private rental sector, with many landlords leaving the sector and reducing their portfolios due to financial pressure and a lack of confidence in future returns. 'With demand for rented homes at record highs and supply failing to keep up, policies that disincentivise investment will inevitably hurt tenants the most, leading to higher rents and reduced choice.'
