NEW: £30 billion cost for landlords to upgrade properties to EPC minimum

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More than half of all homes in the private rented sector need upgrading to achieve an EPC band C by 2028, with landlords facing a total estimated bill of £30 billion at a time when many are struggling to cover their costs.

About 2.9 million properties are affected, with costs for upgrades ranging from £8,807 per property (EPC D) to £27,366 (EPC G), according to new analysis from Savills.

The bulk of the problem remains with older housing stock as more than two-thirds (71%) of homes built before 1950 were given an EPC below C in 2021-22, while just 12% of property built post-1995 need improvements.

Landlords’ costs could be capped at £25 billion if the government were to impose a limit of £10,000 per property, as has been proposed. 

However, the government has appeared to acknowledge its targets are too ambitious as earlier this week Housing Secretary Michael Gove suggested a delay in bringing in energy efficiency plans for the PRS. Citing financial pressures on landlords, he told The Telegraph that the government should relax the pace of changes to EPC targets.

Challenging

Lucian Cook (pictured), Savills’ head of residential research, says funding these works will be challenging. While low-cost options such as low energy lighting and installing heating thermostats have been fairly widely adopted, the cost of big-ticket items, such as solar PV and heating, solid wall and solid floor insulation remain significant barriers to further improvement for many.

“If the programme to introduce these changes is pushed back, it will reduce some of the immediate financial pressure on landlords and give them more time to plan works effectively,” he adds. 

“However, current mortgage costs and the end of assured shorthold tenancies are still likely to cause some buy-to-let investors to re-evaluate their position, constraining supply and adding to upward pressure on rents.”

LandlordZONE editor Nigel Lewis recently found out the cost of upgrading his property to a ‘C’ from a weak ‘D’.

View Full Article: NEW: £30 billion cost for landlords to upgrade properties to EPC minimum

‘Stop demonising landlords, it’s just not helping the situation’

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“Be careful what you wish for” is the point I would put to organisations such as Shelter, Generation Rent and other tenant groups. 

In other words, stop demonising landlords – it’s not helping the situation especially when we have such a severe rental stock crisis. 

Social housing and temporary accommodation are at breaking point; the private rental sector has been trying to prop them up for years. If you keep poking the bear, it will eventually bite back.

To be clear, I have a lot of sympathy for tenants having to pay more in rising rents, but landlords who are coming off two and three year fixed terms at 2% onto new arrangements at 6.5 % have little choice – their monthly mortgage payments have gone up dramatically. 

Previously, many of the landlords I spoke to had not historically put rents up, as they are very happy with their tenants. Now, the vast majority, forced by the rising cost of living including mortgages, energy, food, and council tax (to name but a few), are being forced to increase rents.

Sell up

We have reported many times on stories of landlords deciding they have had enough and want to sell up, not just because of interest rates, but on top of the withdrawal of Section 24 mortgage interest relief, and now the impending Renters (Reform) Bill. 

The worry that landlords will struggle to gain possession of their property once Section 21 is abolished, as well as the future EPC upgrades in 2028, for some it is just not worth the aggravation of being a landlord anymore, especially when landlords are feeling ashamed of being called a landlord. 

The reality is being a landlord is a profession, but it is not recognised by the swider media as such. If you look at the 12-point plan for the Renters Reform Bill, its intention is to increase property standards, provide greater access to property information, offer tenants redress, as they are customers, prevent discrimination against tenants with children or on benefits, and give tenants the opportunity to request a pet. 

Not unreasonable

These are not unreasonable. But what we need to see in conjunction are changes which also give landlords confidence in the new system when it comes to the abolition of Section 21. 

Will there be sufficient mandatory grounds under section 8?  Will there be a high priority on court lists to deal with Anti-Social tenants and what does it look like as to the evidence sought? We need answers to these questions.

Mediation can work if done properly at the early point in a dispute after the notice period. But there must be major resource put in to the court system to deal with the increase in Section 8 hearings and ensure there are enough judges and bailiffs (which at present there is a shortage). The abolishment cannot be rushed until we have the correct mechanisms in place.

I note in a recent press release from Shelter they quoted that 172 tenants are receiving Section 21 non-fault eviction notices per day. 

If that is the case, it would be interesting to see how many landlords are serving those Section 21 notices because they want to sell.  

Common reasons

On recent stats from my company, Landlord Action, the four most common reasons at present are landlords selling, rent arrears, anti-social behaviour and the tenants requesting the landlord evicts them so they can approach the council to be rehoused. 

My worry is when the date is set to end Section 21, which may be in 18-24 months’ time, that there will be landlord panic, as landlords rush to serve notices before the expiry date, as they feel they do not understand the changes or have confidence in the court system. 

Ultimately, evicting a tenant should always be a last resort, but for many landlords who have never had to apply to the court in the past, they are now doing it for the first time, as they want to sell and exit the sector.

It is right that landlords are ‘business-reviewing’ their portfolios as increased costs across the board are a challenge.

Look at the case of Ian Jackson. He has sold 40 of his 142-property portfolio in Belfast, Manchester and Scotland, 20 in the last 12 months. 

Good tenants

What does that mean?  It means that good tenants are being asked to leave, so those tenants will now have to battle it out with other applicant tenants, for far fewer properties and will undoubtedly have to pay more rent in a new property.

It goes back to what said at the start of this, be careful what you wish for. Without the pressures which have been put on landlords, Ian Jackson, and many others like him, might still be in the market.

Changes can happen but as I have said before, they need to protect tenants AND landlords, as both are required for a thriving PRS.

Plummeted

Here’s some stats for you.  In June 2019, there was 370,000 properties in the private rental sector, now we have 241,000.  Rental stock has plummeted by 35% in the last four years according to consultancy TwentyCi.

But let’s not be half glass full… despite these problems there are endless tenant applicants; the best choice of tenant pool; rents remain strong; and the lowest void periods than ever before.

So it’s not all bad. Landlords and letting agents have navigated the endless new rules and changes in the private rental sector since 2007, when Deposit Protection legislation was introduced, and I’m sure many will continue to do so.

View Full Article: ‘Stop demonising landlords, it’s just not helping the situation’

BREAKING: Government rows back on 2035 gas boiler ban within rented properties

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The Government has rowed back on its commitment to phase out all gas boilers in rented homes by 2035 following comments by Michael Gove.

Talking to Times Radio, the housing secretary said that “there are proposals to decarbonise our existing housing stock, which I think are the right direction to go.

“But the costs which some of those changes may impose on homeowners, and indeed landlords, I think that at this point in time we do need to be careful about”.

The announcement will disappoint the heat pump lobby, who only last month called for the banning of gas boilers to be brought forward to 2028.

U-turn

Gove’s comments follow another U-turn on energy efficiency earlier this week when he said his Government would relax the rules for the MEES scheme, which at the moment requires most rented properties to reach a band ‘C’ EPC by 2025 and 2028 (for new and then existing tenancies) to be rented out legally.

Gove went on to say during the radio interview that “there is particular pressure that’s been placed on the private rented sector – they have to move faster than other in order to meet energy efficiency standards – I think we’re asking a little too much of them and therefore we will give a greater degree of breathing space”.

But these announcements may not go down well electorally, even if it’s popular among landlords.

A poll by Opinium published this week found that, among voters who voted Tory in in 2019 and planned to switch to Labour at the next election, 57% felt that the prime minister was not green enough while 25% felt he had got it about right and 9% ‘gone too far’.

View Full Article: BREAKING: Government rows back on 2035 gas boiler ban within rented properties

BREAKING: Government rows back on 2035 gas boilers ban within rented properties

admin    Uncategorized     agents

The Government has rowed back on its commitment to phase out all gas boilers in rented homes by 2035 following comments by Michael Gove.

Talking to Times Radio, the housing secretary said that “there are proposals to decarbonise our existing housing stock, which I think are the right direction to go.

“But the costs which some of those changes may impose on homeowners, and indeed landlords, I think that at this point in time we do need to be careful about”.

The announcement will disappoint the heat pump lobby, who only last month called for the banning of gas boilers to be brought forward to 2028.

U-turn

Gove’s comments follow another U-turn on energy efficiency earlier this week when he said his Government would relax the rules for the MEES scheme, which at the moment requires most rented properties to reach a band ‘C’ EPC by 2025 and 2028 (for new and then existing tenancies) to be rented out legally.

Gove went on to say during the radio interview that “there is particular pressure that’s been placed on the private rented sector – they have to move faster than other in order to meet energy efficiency standards – I think we’re asking a little too much of them and therefore we will give a greater degree of breathing space”.

But these announcements may not go down well electorally, even if it’s popular among landlords.

A poll by Opinium published this week found that, among voters who voted Tory in in 2019 and planned to switch to Labour at the next election, 57% felt that the prime minister was not green enough while 25% felt he had got it about right and 9% ‘gone too far’.

View Full Article: BREAKING: Government rows back on 2035 gas boilers ban within rented properties

Landlords face secret subletting surge

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A worrying trend among tenants who have been secretly subletting their landlords’ properties has been revealed.

The study from Direct Line business insurance delved into the practices of renters across the country and found that a staggering 48% of subletting tenants had failed to disclose this arrangement to their landlords.

View Full Article: Landlords face secret subletting surge

Property118 Ambassadors Guide

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Property118 currently works with hundreds of Ambassadors, many of which are Accountants and other professional advisers of our existing clients including; mortgage brokers, letting agents, estate agents, insurance brokers, IFA’s, conveyancing solicitors etc.

We have created this page to provide full transparency of these arrangements.

View Full Article: Property118 Ambassadors Guide

Official report backs binning leasehold but some owners ‘still worried’

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Ditching leaseholds is ‘entirely possible’ although some flat owners still aren’t convinced about moving across to commonhold, a government report has concluded.

It explains that while reaching a point at which most existing flats are owned without a third-party landlord or are commonhold is ‘not impossible’, the process of moving to different ownership or management structures was considered a significant barrier.

Many felt it would be too time-consuming or costly and were concerned about the potential for disagreements with neighbours.

A DLUHC study – Living in and looking after shared buildings: the perspective of leaseholders and prospective flat buyers – found that people were initially excited by the idea of taking more control but, once they considered it further, had some concerns about how it would work in practice and whether they or their neighbours had sufficient skills and spare time to carry out the function properly.

But it believes that providing more details about appointing external directors or using a management company could help reassure flat owners that they will not necessarily have to take on large amounts of additional responsibility.

Meanwhile, many thought commonhold would give them greater control, be democratic and transparent.

The Association of Leasehold Enfranchisement Practitioners believes the report clearly shows the intended direction of travel for leasehold reform.

No awareness

Director Mark Chick (pictured) says most participants had no awareness of the right to manage in leasehold, nor that commonhold is an alternative to leasehold.

He adds: “The report shows that although awareness of commonhold is low, when participants were provided with more information about commonhold ownership, they generally viewed it positively in theory.”

Earlier this year, Housing Secretary Michael Gove dropped plans to abolish leaseholds in England and Wales after Downing Street officials argued there was not enough time to enact such major reforms.

View Full Article: Official report backs binning leasehold but some owners ‘still worried’

Gove consults landlords on looser rules for commercial to residential conversions

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Landlords are being encouraged to share their thoughts on government plans to make it easier to convert larger department stores, space above shops and offices. 

As part of Housing Secretary Michael Gove’s announcement on regeneration, inner-city densification and housing delivery across England, the consultation on new and amended permitted development rights aims to “unleash building on underused sites in high-demand regions”.

The government’s report explains how residential uses can help diversify and create more resilient high streets.

“We are therefore exploring ways in which this right could be amended to reflect the changing landscape of our high streets and to deliver more homes,” he says.

“Changes will support the delivery of additional homes across England that might otherwise have not come forward through a planning application.”

Permitted development

The permitted development right currently allows up to 1,500 sqm of commercial, business and service use to change to residential, for example, to provide for up to 20 two-bed homes.

It proposes allowing more floorspace to change to residential use and wants views on whether the size cap should be doubled to 3,000 sqm or removed to provide no limits on the amount of floorspace that can change use.

Premises need to be vacant for a continuous period of at least three months immediately prior to the date of the application for approval under existing rights, as a way to safeguard against businesses being displaced.

But the government believes the requirement may be ineffective and could result in a property being left vacant for longer periods. It proposes removing this requirement to provide greater flexibility for owners, to enable more premises to change use, and deliver additional homes.

The consultation closes on 25^th September.

View Full Article: Gove consults landlords on looser rules for commercial to residential conversions

Landlords given five months to join enlarged £800 London licencing scheme

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More than 5,400 homes in Islington now need a licence under Islington Council’s new selective licensing scheme. 

Landlords in Finsbury Park, Tollington and Hillrise wards are affected, where properties are blighted with poor conditions, according to council enforcement officers who have been deluged with thousands of complaints about disrepair, damp and mould, inadequate facilities and safety issues. 

The scheme, approved by the council’s executive, triples the old Finsbury Park scheme it replaces and takes effect on 1^st January 2024. All existing selective licences will transfer to the new scheme so there will be no need for landlords who have already applied and paid for a licence to reapply.

The council estimates that 3,500 selective licences could be issued, with a fee of £800 and a £75 reduction for accredited landlords, generating an income of about £2.7 million over the next five years.

Riddled

Councillor Una O’Halloran (pictured), executive member for homes and communities, says: “While the vast majority of Islington’s landlords are responsible and let good quality homes, renters have told us that many others are riddled with safety and other issues, while their rent continues to soar.”

She adds: “This new licensing scheme will mean landlords must do more in hazard hotspots to protect tenants – or face action from our enforcement team.” 

Overall response rates to a council consultation were very low and there was a significant difference in opinion between landlords and tenants, with 15% of private landlords and managing agents in favour of licensing but 72% of tenants.

The scheme has taken years to be implemented; councillors were discussing options back in May 2020.

View Full Article: Landlords given five months to join enlarged £800 London licencing scheme

LANDLORDS – How to survive: A no-nonsense, straight talking and practical education day

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With the turmoil and the uncertainty in the market for landlords, I’ve teamed up with Property118 to put on an event for the 19th of October in Central London, with a host of experts in Tax, Company Structuring, Finance, Legal

View Full Article: LANDLORDS – How to survive: A no-nonsense, straight talking and practical education day