"The rental sector is already facing a potential exodus of landlords"
While you might be unfamiliar with the bill’s name, its content you will recognise. It calls for all new tenancies to have an Energy Performance Certificate (EPC) of at least a C from December 2025 and all existing tenancies from December 2028.
The remit of the Bill has been so well publicised that you could be forgiven for assuming it has already been passed – but this is not the case.
There has been much talk as to what landlords will need to do to get their houses in order, but as of yet, no date has been set and the Bill’s implementation by 2025 is by no means cut and dried.
May 6 – the date it was due to have its second reading has come and gone, with no word as to when it will be rescheduled. The progression of a Bill from its initial stages to becoming law can be a long one, which means the longer it lingers at the starting line, the further away it potentially moves from a 2025 start date.
That’s not to say it will be forgotten altogether but what we could see is its implementation pushed back to nearer 2030 – the date originally put forward in the Government’s Energy White Paper; Powering our Net Zero Future.
The energy crisis and a change of cabinet will no doubt have hampered the Bill’s progression, as too did the passing of its main sponsor, the former MP for Southend West, Sir David Amess, who was tragically murdered in October 2021. Conservative MP for North Thanet, Sir Roger Gale, is now the bill’s sponsor, but we are still no further forward.
Its make-or-break stage might come in the form of COP27 – the United Nation’s Climate Change Conference. The conference takes place this November in Egypt and the UK will be looking to bring as much as it can to the table.
There will no doubt be those who might breathe a sigh of relief if the Bill were to be delayed.
Buy-to-let (BTL) lender Paragon Bank recently estimated the average cost to landlords to upgrade each of their properties to a C rating will be £10,560 – just over the Government’s proposed cap of £10,000 per property. The scale of such a cost could inevitably cause some landlords to re-think their position and look to sell.
The rental sector is already facing a potential exodus of landlords in response to the Government’s plans to outlaw Section 21 evictions, also known as ‘no fault evictions’ whereby a landlord can evict a tenant for no reason at all.
The Government has outlined plans to introduce a Bill in 2022/23, which would see an end to the controversial practice. Recent research from BTL lender The Mortgage Works reported one in four landlords plan to sell some, or all of their properties if no fault evictions are scrapped.
The last thing the rental sector needs is landlords selling and putting even more pressure on supply; especially at a time when we are seeing reports of prospective tenants queuing in the street to view rental properties.
Nevertheless, the state of limbo in which we find ourselves is not helpful. Without confirmation of an implementation date, landlords understandably are in no rush to carry out any energy efficiency measures.
Conversely with mortgage rates on the rise, those investors looking to remortgage to fund any potential EPC upgrades will undoubtedly want to know sooner rather than later about the Government’s plans. As too do firms like ourselves, whose surveyors are in the process of completing their Domestic Energy Assessor training. This will allow some of our surveyors to carry out assessments for landlords and homeowners, outlining the work and cost needed to reach a C rating.
If 2025 is still the preferred date, as an industry we need to start helping landlords plan now. Let’s hope the issue moves up the agenda of the new Tory cabinet and we are soon given the clarification we need.
