Targets too Ambitious:

The Business, Energy and Industrial Strategy Parliamentary Committee has launched an inquiry into the Government’s approach to delivering energy efficiency improvements to buildings.

This inquiry is examining whether the Government’s current delivery of energy efficiency improvements within residential, commercial and public-sector buildings is consistent with meeting targets set out in its Clean Growth Strategy.

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The inquiry is also likely to focus on action to upgrade the energy efficiency of fuel-poor homes and the Government’s work to drive demand for energy efficiency measures within able to pay households, says the committee.

The government says that energy efficiency is high on its agenda, with targets getting progressively stricter in the run up to the 2030, when private rented properties must have an EPC rating of C or better.

However, in submitting its respond to the now closed consultation, which asked – are the targets too ambitious? – ARLA propertymark argues that, yes, they are too ambitious.

“We argue that the Government’s targets are too ambitious and will result in landlords having to spend serious amounts of money refurbishing properties to bring them up to an EPC rating of C by 2030.

“This is at a time when landlords with buy-to-let residential properties face hits to their net profit through a series of recent government policies such as cutting mortgage interest relief, stamp duty surcharges and other tax changes.

“Little funding assistance is offered to landlords to help them spread the cost of remedial work, meaning that money needed for improvement has to come from their own pockets.

“We proposed that the Government should take an alternative approach and move towards a property MOT system that encompasses many elements of property standards, including energy efficiency and safety checks.

“The MOT approach would mean that tenants could be confident in the standard of their home, and rogue landlords would be deterred from remaining in the sector. It would also give landlords greater clarity on their responsibilities and be able to deduct the cost of the MoT from Income Tax,” says ARLA propertymark.

ARLA argues that the 2035 target for all homes in the UK is achievable, but for the social housing sector only, as this sector is supported by government funded initiatives. However, for the private rented sector it’s a different story, ARLA says.

“The private rented sector is the second largest tenure type, making up approximately 20% of the total market and is growing, but the sector lacks the funding pots that benefit the social sector, which makes up 17% of the total housing stock by tenure.

“We argue that all future ECO funding should be stopped and all future funding from energy suppliers should be dedicated to the private rented sector, redressing the imbalance of previous years,” says ARLA propertymark

ARLA thinks that properties with ratings below E would cost nearly £6000 to bring up to standard, rather than the £1200 suggested by the Government, and it would generally be uneconomic for landlords to upgrade many of these properties. In these cases landlords could be well advised to sell, rather than tackle the energy efficiency issue, warns the agents’ body.

This would of course be detrimental to tenants because it would lead to rental property scarcity, higher rents and would also go against the government’s policies of tackling homelessness.

ARLA propertymark suggests:

“We’d like to see the Government make it easier for landlords to access funding whilst also reversing its decision to introduce the “landlord contribution” element to bring properties up to the target EPC ratings. If they don’t do this, more landlords will sell off part or all of their portfolios and the problem will instead be transferred to a different housing tenure.”

The ARLA propertymark response in full

BEIS Committee launch energy efficiency inquiry

1 COMMENT

  1. For many LL selling properties that would cost what is considered to be roughly £6000 to achieve EPC C status would be a very wise move.
    Most of the LL are barely making a profit and once you factor in S24 that profit disappears.
    Far better to sell these effectively now dud investment properties to the private residential homeowner market who won’t be subject to these ridiculous EPC requirements.
    It will as has been suggested lead to a massive reduction of properties available for rent in the PRS and will result in vastly increasing rents as that rental supply reduces.
    Tenants will find they have to move further away abd commute to be able to source affordable rental accommodation.
    It will be for the new hineowners who have bought these dud ex-rental properties to do them up and part of that will probably involve the honeowner improving the property to qualify for EPC C ststus but of course they will be living in a veritable building site but won’t mind as that is what homeowners have always done when imoroving their homes.
    A LL simply could not afford the losses and the years it would take to recover the EPC investment.
    House price increases won’t pay for it as there won’t be any of those for years!!
    Most LL with these dud properties are in their fifties.
    They really don’t want to waste money when it would take decades to recover that EPC investment.
    So LL would be better off getting rid of these dud properties before most people are aware they are actually dud properties.
    LL need to forget EPC E status; it is whether C status is readily achievable that should be the aim of LL.

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