Tenants will be able to challenge landlords over Awaab’s law and could win compensation

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Tenants will be able to challenge landlords over Awaab’s law and could win compensation

The government has warned that all landlords will need to meet Awaab’s Law requirements, as tenants will be able to challenge landlords in court over breaches.

Under the Renters’ Rights Act, Awaab’s Law will be extended to the private rented sector (PRS), where landlords will have to fix damp and mould within strict timeframes.

Awaab’s Law has already taken effect for social housing landlords, but the government says it understands the differences between social housing and the PRS and will apply the law in a way that is “fair, proportionate and effective” for landlords and tenants.

The government has not yet confirmed a date for implementation, but Awaab’s Law is expected to come into force during phase three of the Act, in 2027.

If landlords fail to comply, tenants will be able to challenge them

According to the Renters’ Rights Act guidance, landlords will need to meet strict timeframes to deal with damp and mould.

The government guidance says tenants will be able to challenge landlords for breaches and even gain compensation.

The guidance says: “In line with the approach taken for social housing, Awaab’s Law will imply terms into private rented sector tenancy agreements. This means all private landlords will have to meet Awaab’s Law requirements, for example, on timescales for dealing with hazards such as damp and mould, when these are set out in regulations.

“If landlords fail to comply, tenants will be able to challenge them through the court for breach of contract. If the court finds the landlord in breach, they will be able to order the landlord to take appropriate action and/or pay compensation.

“Seeking redress through the courts is not the only way that residents can challenge their landlords for breaches of Awaab’s Law. Tenants may wish to complain to their landlord and, if they are not satisfied with the response, this could then be escalated to the new Private Rented Sector Landlord Ombudsman.”

We recognise that there are differences between the private and social rented sectors

Whilst the government has not yet set out what these timeframes will be for the PRS, for social housing all emergency hazards need to be fixed within 24 hours and any potential significant hazards must be investigated within 10 working days of becoming aware of them.

Under Awaab’s law, social housing landlords must cover the cost of alternative accommodation for tenants if the property cannot be made safe within a specific timeframe.

The government claim they understand there’s a difference between the PRS and social housing sector and will work with private landlords and tenants.

The government guidance says: “Everyone deserves a home that is safe, decent and secure, so it is only right that Awaab’s Law protections should be in place for renters regardless of whether their homes are privately or socially rented.

“We recognise that there are differences between the private and social rented sectors. We will carefully consider how best to apply Awaab’s Law to the private rented sector in a way that is fair, proportionate and effective for both tenants and landlords, and will consult on this. We will set out further detail on our plans in due course.”

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Is Section 21 valid if the EPC was served late but before notice?

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Is Section 21 valid if the EPC was served late but before notice?

Hi, I’ve served a Section 21 notice on a tenant and I’m getting conflicting advice regarding the EPC validity and when it should be served on the tenant to validate a Section 21.

The AST began six years ago. I didn’t have or serve a valid EPC at the time. I commissioned and served/shared with the tenant a valid EPC in January 2025. I served a Section 21 in September 2025.

Even though I served a valid EPC prior to serving the Section 21, I didn’t have or serve a valid EPC at the beginning of the AST. Does this invalidate the Section 21?

Any advice would be appreciated.

Thanks,

PK

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Interest rates fall to 3.75% as Bank of England eases borrowing pressure

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Interest rates fall to 3.75% as Bank of England eases borrowing pressure

The Bank of England has reduced its base rate from 4% to 3.75%, cutting borrowing costs to their lowest level since February 2023.

The decision had been widely anticipated after recent data pointed to a cooling economy.

Markets had already priced in a move, with analysts expecting policymakers to act following a run of softer figures.

Inflation came in lower than forecast at 3.2%, wage growth showed signs of easing and broader activity has slowed.

The base rate acts as a benchmark for banks and lenders, shaping what households and businesses pay on mortgages, credit cards and loans.

Five voted for rate cut

Five members of the Bank’s nine-member Monetary Policy Committee voted for a rate cut, while four wanted to hold it at 4%.

The Bank’s governor Andrew Bailey, said: “We still think rates are on a gradual path downward but with every cut we make, how much further we go becomes a closer call.”

The chancellor Rachel Reeves has welcomed the news of the pre-Christmas rate cut.

She said: “This is the sixth interest rate cut since the election – that’s the fastest pace of cuts in 17 years, good news for families with mortgages and businesses with loans.”

Industry reaction to base rate cut

Steve Cox, Chief Commercial Officer at buy-to-let lender, Fleet Mortgages: “The Bank’s decision to cut Bank Base Rate today will come as little surprise given recent market sentiment and the broader economic signals pointing in this direction. In many ways, a number of lenders have been ahead of this particular curve having been actively pricing it into products.

“We’ve seen a flurry of mortgage rate cuts across the residential and buy-to-let sectors over the last week or so perhaps in anticipation of this decision and in an attempt to grow volume and pipeline as we move into 2026. In the buy-to-let space, product pricing continues to improve, supported not just by this rate change, but by swaps which are increasingly aligned with the view that further cuts could follow into 2026.

“For landlords, this is a positive way to end the year, and a promising start to 2026. With greater certainty following the Autumn Statement – including clarity on tax changes that won’t bite until April 2027 and with the Renters’ Rights Act coming into force next year, any opportunity to reduce monthly mortgage costs will be welcomed.

“Landlords coming to the end of two-year deals in particular will find a much more competitive rate environment than they did in 2023 or early 2024, and this should support renewed purchase and refinance activity in the months ahead.”

Festive cheer for borrowers

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: “A cut in base rate was a dead cert after the recent inflation figures, which while still above the Bank’s 2 per cent target, are moving in the right direction.

“This news will add to the festive cheer borrowers are already experiencing with lenders cutting mortgage rates, keen to attract business and get 2026 off to a strong start.

“With some lenders repricing on a weekly basis, it is now possible to access a short-term fix at just over 3.5 per cent. Given how relatively quiet activity is with the usual pre-Christmas lull, we would expect to see rates dip below that level in late December or early January. It might take a little longer for five-year fixes to breach the 3.5 per cent barrier but it could happen in the new year, with rates currently at just over 3.7 per cent.

For next year Mr Harris predicts further base rate cut: “Market expectations are for another two or three base rate reductions in the new year. This will provide a welcome shot in the arm for the housing market now which suffered from pre-Budget speculation over property taxes which on the whole were not as bad as many feared.

“Those remortgaging in the next few months have a free throw of the dice as rates can be booked up to six months before you need them. You can book a rate now and review prior to completion, if rates have fallen by then, you can enquire about switching to lower rate. If not, you can keep what you have.”

Sprinkle of good news

Nick Leeming, Chairman of Jackson-Stops, comments: “Today’s news is a shot in the arm for the housing market just as we enter peak property browsing season over the Christmas break. Lower borrowing costs is a key driver of renewed buyer confidence. Unlocking more competitive pricing should lower monthly repayments for homeowners on variable or tracker mortgages, improve affordability at the low to mid end, and stimulate buyer activity.

“We expect to see a gradual increase in buyer enquiries, improved sentiment, and a more balanced market, with the potential to encourage discretionary movers and international buyers back into the market. While broader economic factors such as employment trends and wage growth still influence buyer behaviour, ultimately lower borrowing costs will make moving home more financially feasible.

“The sprinkle of good news for the housing market has come at a much-needed time after a market freeze in the run up to the Budget. Whilst the consequences of the resulting mansion tax have yet to be determined, many are now breathing a sigh of relief with certainty in the air and added economic confidence from falling interest rates. The resilience of the housing market over the past few months points to an expected period of long-term stability.”

Extremely positive

Nathan Emerson, CEO of Propertymark, comments: “As we round the year off, it is extremely positive to see the Bank of England in a position where it has the confidence to make what is now a fourth base rate cut within twelve months.

“Although mortgage agreements vary, today’s news could typically represent a saving of around £150 each month for those currently on a tracker mortgage, or for those considering a new mortgage deal, when compared to the start of 2025.

“This, coupled with the fact that we have also witnessed the rate of inflation dip further only yesterday, should help create a strong platform for consumer confidence and affordability as we progress into the new year. In addition, there is real potential for lenders to support first-time buyers with more focused products to help uplift the market over the coming weeks and months.”

Boost for the property and mortgage markets

Kris Brewster, Retail Director at LHV Bank said: “As CPI inflation dropped to a lower than expected 3.2% yesterday, the lowest number for eight years, this opened the door for the MPC to vote in favour of a cut to 3.75%.

“This will be a boost for the property and mortgage markets before the start of a new year as loans potentially become more affordable, but savers face a bigger battle to protect their incomes and spending power in the face of frozen income tax thresholds and the higher cost of living overall.

“To beat sticky inflation, consumers must protect their cash by shopping around ready to switch to current account rates delivering inflation beating rates, rewarding customers for their loyalty in a market that so often returns so little on day-to-day money. With Moneyfacts data suggesting one in four savers have never switched accounts, consumers must get out of their comfort zone to beat the downward trajectory of Base Rates predicted over 2026 and lock in higher returns with a top ranked provider now.”

Cut is not a great surprise

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “This cut is not a great surprise given the news that has come out this week which isn’t all good for the economy.

“The encouraging news is that the housing market has been relatively resilient despite many concerns about the contents of the Budget, which turned out not to be as bad as anticipated. We don’t expect fireworks after the new year but now interest rates are a little lower, we do expect a gradual improvement with property price increases tempered by continuing concerns about the economy and the amount of choice available.

“Many of our customers have been sitting on their hands, not knowing which way to turn but they haven’t withdrawn from the market altogether. Many are now saying since the Budget – ‘why not?’ rather than ‘why?’, which is what they were saying previously.”

Bank Rate cut headlines are always positive for home-mover sentiment

Matt Smith, Rightmove’s mortgages expert says: “The financial markets and mortgage lenders have been expecting today’s Bank Rate cut for a while, and therefore responded early with mortgage rate cuts in December to round off the year. Bank Rate cut headlines are always positive for home-mover sentiment, even if this one has already been baked into mortgage rate cuts and won’t drive further drops.

“However, what will have more of an impact on the future direction of mortgage rates is the better than expected inflation figure reported earlier this week, which has improved the market’s forecast for next year.

“Don’t expect any big rate drops before Christmas while the property market is quieter, but it does mean we could now see a fresh round of rate cuts in the new year as lenders look to start the new year with a bang. Home-movers are likely to see the most notable rate drops for two-year fixed products rather than five, and next year we expect the gap between two-year and five-year deals to grow.”

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Generation Rent calls for eviction compensation for Welsh renters

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Generation Rent calls for eviction compensation for Welsh renters

Ahead of the Senedd elections next year, a tenant group is demanding all political parties pledge in their manifestos to stand up for renters by limiting rent rises and providing two months’ rent as compensation for tenants if evicted.

Generation Rent claims Welsh renters are “more exposed to arbitrary or revenge evictions than anywhere else in Britain” after Scotland, and soon England, banned no-fault evictions.

However, the Welsh government previously dropped a controversial proposal under which tenants facing a no-fault eviction would have received their final two months’ rent free as compensation, arguing it could lead to unintended consequences, including higher rents and increased homelessness.

Reduce the harm of evictions by requiring landlords to waive two months of rent

Generation Rent claims that all political parties should pledge in their manifestos to: “Reduce the harm of evictions by requiring landlords to waive two months of rent when they have used a ‘no-fault’ eviction ground.”

According to Generation Rent, the average unwanted move costs the typical private renter household in Wales £1,543, covering expenses like the upfront deposit, overlapping rent, and time taken off work.

The tenant group claims that introducing this compensation at the start of the tenancy would help.

Generation Rent said: “To optimise incentives for both parties, the waiver of rent could take place at the very start of the notice period. This would free up cash for moving costs immediately, removing the reason the Welsh government identified for the tenant to delay their search for a new home.

“This would then give the landlord much greater assurance that they will gain possession by the end of the notice period, and local government greater assurance that the tenant will not seek homelessness support.”

However, the Welsh government previously rejected this proposal, claiming it “could cause tenants to delay securing alternative accommodation and result in more people presenting to homelessness services”.

Remains unfair and harmful for landlords to be able to force renters out

Generation Rent is also calling for political parties to end “unfair evictions by replacing Section 173 ‘no-fault’ evictions with grounds that require a specified and legitimate reason to evict, while protecting the six-month notice period for renters”.

In Wales, landlords can use a Section 173 notice, the equivalent of a Section 21 notice in England.

Under Section 173, renters in Wales have the longest notice period in the UK, with tenants given six months to leave their home.

Generation Rent says the Renting Homes (Wales) Act 2016 has improved protections for renters, pointing to a 58% drop in accelerated possession claims, most of which involve “no-fault” evictions, from 268 claims between January and March 2023 to 113 claims over the same period in 2025.

However, the tenant group says the continued existence of Section 173 notices allows landlords to dodge any new protections against unaffordable rent hikes.

The group says: “It remains unfair and harmful for landlords to be able to force renters out without needing a specified and legitimate reason. Renters should be able to have the protection of both a six-month notice period and clearly defined grounds for eviction.”

Renters across Wales are at constant risk of losing their home

The tenant group is also calling for rent rises to be limited to once a year, capped at the lower of wage growth or Consumer Price Index inflation, claiming this would protect people from being priced out of their homes.

Ben Twomey, chief executive of Generation Rent, said: “Homes are the foundations of our lives. But renters across Wales are at constant risk of losing their home through no fault of their own, either through an eviction or a sudden rent hike. The impact ripples across society, forcing people into poverty and homelessness and placing extra strain on public services.

“This election represents a huge opportunity for all political parties in Wales to commit to making sure renters have a secure and affordable home, giving people the secure foundation from which to thrive.”

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How to Protect Your Liquidity When Refinancing a Portfolio

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How to Protect Your Liquidity When Refinancing a Portfolio

Refinancing is a critical moment for landlords. It can unlock equity, improve terms, or restructure debt – but it can also create liquidity risks if not managed carefully. Rising rates, tighter stress tests, and higher fees mean that cash reserves are more important than ever. Protecting liquidity during refinancing ensures that landlords remain resilient, even under pressure.

Why Liquidity Matters

Liquidity is the buffer that protects landlords against unexpected shocks. Without sufficient cash or readily available reserves, even a temporary void or rate rise can cause major problems. Lenders know this, which is why liquidity is increasingly central to underwriting decisions in commercial finance.

Liquidity Risks in Refinancing

• High redemption costs – early repayment charges or exit fees can reduce available capital.
• Reduced loan sizes – stricter stress testing may lower borrowing capacity, leaving landlords short of expected funds.
• Increased monthly payments – higher interest rates reduce free cash flow, squeezing liquidity buffers.
• Transaction costs – valuations, legal fees, and broker costs can add up, eating into reserves.

Strategies to Protect Liquidity

• Plan early – start refinancing discussions 6–12 months before loans mature to avoid forced decisions.
• Build buffers – set aside cash reserves equal to at least 3–6 months of portfolio debt service.
• Negotiate covenants – aim for realistic terms that avoid liquidity drains during temporary downturns.
• Use staggered maturities – avoid refinancing all loans at once to spread risk over time.
• Consider blended facilities – portfolio loans that balance higher-yielding assets with stable properties can provide smoother cash flow.

Practical Examples

• A landlord facing multiple loan expiries consolidates into a single commercial facility, reducing monthly outgoings and preserving liquidity.
• A portfolio owner builds a £100,000 cash buffer before refinancing, ensuring capacity to handle voids and interest rises.
• An HMO investor negotiates covenants based on portfolio-level performance, protecting liquidity despite occasional property-specific voids.

The Role of NACFB Brokers

NACFB brokers help landlords refinance strategically, balancing equity release with liquidity protection. They know which lenders are flexible on covenants, how to negotiate reserve requirements, and how to structure deals that safeguard cash flow. Their expertise ensures refinancing strengthens, rather than weakens, liquidity.

Conclusion and Takeaway

Refinancing is more than just chasing the best rate. For landlords, protecting liquidity is the foundation of resilience and long-term success. With careful planning and the guidance of an NACFB broker, refinancing can improve both terms and stability without draining reserves.

Next Steps

If you would like to explore refinancing options that protect liquidity, please complete the short form below and an NACFB member broker will be in touch.

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Published: 17 December 2025

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Landlords face tougher penalties as rent repayment orders expanded

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Landlords face tougher penalties as rent repayment orders expanded

The government has announced changes to rent repayment orders under the Renters’ Rights Act.

New changes include offences for providing false information to the Private Rented Sector (PRS) Database and knowingly or recklessly misusing a possession ground.

The news comes after the government published a list of civil financial penalties, under which landlords could be fined up to £6,000 for discriminating against those on benefits and children.

The maximum amount of rent a landlord can be ordered to repay will double from 12 to 24 months

A rent repayment order is a mechanism where a landlord who has committed an offence can be ordered to repay an amount of rent to the tenant or local authority.

The Renters’ Rights Act guidance, says the Act will extend rent repayment orders which will now include: “To the offences of knowingly or recklessly misusing a possession ground, breach of a restriction on letting or marketing a dwelling-house, continued tenancy reform breach after imposition of a financial penalty, continued breach of landlord redress scheme regulations after imposition of a financial penalty for this breach, provision of false information to the PRS Database when purporting to comply with PRS Database regulations and continued failure to register with the PRS Database after imposition of a financial penalty for this breach.”

Under the new rules, the maximum amount of rent a landlord can be ordered to repay will double from 12 to 24 months. The period in which a tenant or a council can apply for a rent repayment order after an offence has been committed will also be extended from 12 to 24 months.

Rent repayment orders will also apply to superior landlords and company directors, which the government says will “ensure criminal rent-to-rent arrangements can be properly held to account”.

Crack down on repeat offenders

The government has also announced that landlords who have previously been subject to enforcement action for an offence will be required to pay the maximum rent repayment order amount if they commit the same offence again, in a move the government say will crack down on repeat offenders.

The government guidance says: “Where a landlord has been convicted of or received a financial penalty for licensing offences or any of the relevant offences across the Act, they will be required to pay the maximum rent repayment order amount.

“This will ensure the deterrent effect is equally strong across all listed offences and that the deterrent effect is increased for the offences to which this provision did not previously apply.”

Property118 commercial reality check

Many landlords will read this and feel the ground shifting again beneath their feet. That reaction is understandable. The rules are expanding, the penalties are heavier and the margin for error is narrowing. None of this reflects badly on landlords who already act responsibly. It reflects a policy environment that increasingly assumes bad faith and then regulates accordingly.

What landlords should do next

Protect yourself against misunderstanding, not just misconduct. Keep written evidence explaining why possession grounds are used, even when the reason feels obvious. The risk now sits as much in interpretation as in behaviour.

Prepare for the PRS Database before it exists. Even though the database is not yet operational, begin aligning tenancy records, licensing details and ownership information now. When registration becomes mandatory, readiness will matter more than speed.

Clarify accountability across all arrangements. Where companies, directors or superior landlords are involved, document control and responsibility clearly. This is preparation, not admission of fault.

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Share of Freehold company in a real mess?

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Share of Freehold company in a real mess?

I own two properties in a development of 52. Each property owns 1/52nd of the freehold, so I own about 4%. I was also a director (1 of 5).

In late November, one director and the managing agent were starting to be very obstructive, wouldn’t allow a vote for a chairperson, wouldn’t allow voting for decision making, kept vetoing decisions. If any of us asked for visibility to the company bank account, we were shut down and told we were being ‘confrontational’. You get the idea. Yes I realise that’s not legal for one director to put us in this situation but it happened because two people retired (old chairman and old managing agent) who had essentially set us up to fail, we had got into a bad place and 3 of the 5 were trying to fix it (one was absent due to personal reasons).

In additon our new managing agent turned out to be pretty useless, volatile, divsive, etc. A one-woman band, shoehorned in by the retiring managing agent. No qualifications, not other blocks being managed, doesn’t have a company, doesn’t have PI or PL insurance, nor understand what they are. No accredditation and sole access to the company bank account which holds over £200k. There is zero oversight on the account, and no limits on how much she can transfer, who to or what device to unilaterally do it on. They don’t have a contract and cannot provide one.

Worst of all, they have been found to be telling many untruths. When asked why there is no contract, she says she gave one to the board which was ignored – completely false. When asked if she manages other developments, one day will respond ‘many’ and the next ‘none’, depending on what answer is most helpful to her at the time.

Anyway, 4 directors resigned, hoping this would cause an AGM so all shareholders could appoint a new board who could get on with resolving all the issues. Unfortunately the remaining director refused to resign and is in cahoots with the managing agent. I would say about 50% of the shareholders who are aware of the situation find this both distressing and unhelpful. The company is not functioning, our insurances may be voided due to this and it’s a massive mess.

The remaining director has now called an AGM with one topic on the agenda – to appoint his mate in the flat below and then appoint him as chairman. They called it as a virtual meeting on the 22nd december at 7.30pm. Note this development is two large blocks, consisiting of mainly 3 & 4 bedroom houses. These two guys live in tiny corner flats and are not representative of the shareholders whatsoever. The mate below who is being appointed has quit twice from the board after getting into bitter aguments with other shareholders.

Both the director and managing agent are either ignoring all shareholder emails or responding in the most ineffective way to simply stall or delay.

Having read the M&A of A several times, it’s missing a lot, such as timeframes, and is worded very briefly, which these three people are using to hide behind.

What can any of us legally do? We want a proper meeting. We want to discuss and ask questions. Many of us want to dismiss the managing agent.

Is there something which is statutory in the 2006 Companies Act which can help us in this situation get a light shone on the situation? How can we force these people hiding behind emails and a one-topic Zoom meeting where no shareholder is allowed to speak?

I suspect we need actual real legal advice but wouldn’t know where to start… Help!

Alex

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Landlords risk fines, bans and bankruptcy – The answer?

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Property118

Landlords risk fines, bans and bankruptcy – The answer?

The conversation among private landlords has changed. It is no longer about yields, regulation or market cycles, it’s about survival. The publication of the government’s new civil penalty tables has pushed the sector into unfamiliar territory, where the financial consequences of ordinary operational mistakes are measured in five-figure sums, and the prospect of a banning order is no longer remote.

Across forums, advisory meetings and industry groups, landlords are expressing the same concern. They feel exposed, and they feel targeted. Some now feel unwelcome in the very market they have supported for decades. The shift has been sudden, and it has reshaped expectations about what it means to let property in the UK.

This sense of unwelcome is not just emotional. It is reinforced by policy decisions that introduce penalties large enough to destabilise a portfolio and enforcement powers strong enough to remove a landlord from the sector entirely. Meanwhile, other governments in Europe are signalling the opposite intention. Portugal’s recent move to reduce rental tax to 10% is a striking reminder that not every country is choosing to drive out private investment.

This divergence matters because landlords are increasingly comparing risk, reward and political climate across borders. The UK appears to be moving in one direction while competitor jurisdictions move in another. The consequences for supply, investment and market stability will be felt long before the first banning order of the new regime is issued.

Landlords are right to be concerned. The risks they face are significant, and for some, the financial outcomes can be terminal.

The new civil penalty tables make the scale of the risk impossible to ignore. A selective licensing breach now begins at £12,000. A possession error begins at £30,000. Reletting during a restricted period is set at £25,000. Breaching a banning order carries a starting penalty of £35,000. These are not maximums, they are baselines. They reflect the government’s expectation that councils will enforce actively and consistently.

The escalation is not limited to fines. Councils now have a clearer pathway to apply for banning orders. These orders do more than punish, they prohibit. A banning order removes the landlord from the sector entirely, revokes licences, forces properties into management arrangements and places the individual on the national rogue landlord database. Once imposed, recovery is difficult and in many cases impossible.

The combination of high penalties and lifetime commercial consequences raises a fundamental question about the direction of policy. Private landlords supply most of the rental properties in the UK, yet they are now subject to financial risks that exceed those imposed in many sectors of the regulated economy. A minor administrative failure in property management can now attract penalties that surpass those issued for dangerous conduct in other areas of law.

The effect on behaviour is already visible. Landlords who once focused on refurbishment, portfolio growth or strategic refinancing now spend much of their time calculating whether the returns justify the risks in the long term.

This is not a prediction of market collapse, it is a simple observation. When a government raises the cost of participation, some participants will leave. When another government signals it wants landlords to stay, as Portugal has done by reducing rental tax to 10%, investors pay attention.

The UK can sustain a strong rental market only when private investment is respected, stable and rewarded proportionately. At present, the message being received by landlords is the opposite. Uncertainty is rising, penalties are rising, and administrative risk is rising. That is not a sustainable foundation for a sector that houses millions of people.

The coming year will determine how landlords respond. Some will modernise their processes and remain, others will scale back or exit entirely, but every landlord should recognise that the risk calculus has changed. A fine can now wipe out profit, a ban can wipe out a business, and bankruptcy is not an abstract possibility for those with high leverage and sudden enforcement action.

The warnings are clear; Landlords risk fines, bans and potential bankruptcy. The choices made now will determine who survives the new era of enforcement and who does not.

For landlords who decide not to absorb the new risks, the next question is how to exit safely and sensibly. Selling strategies were discussed in my recent article linked below.

https://www.property118.com/should-you-sell-with-tenants-in-place-a-practical-strategy-many-landlords-overlook/

However, selling is only half of the decision. The other half is where to place the capital once the exit is complete. Rising regulatory risk in the UK does not mean investment opportunity has disappeared altogether. It simply means the playing field has changed. Some investors will look overseas to jurisdictions offering stability and lower taxation. Others will redirect capital into asset classes with lower regulatory exposure. The important point is that landlords have options, and with careful planning the proceeds of a property sale can be deployed in a way that preserves income while avoiding the escalating compliance burden. I recently published an article on this subject too – see link below.

https://www.property118.com/where-to-invest-if-i-sell-my-rentals/

These decisions are not easy, but the environment now demands clarity. Holding rental property is no longer a passive activity (was it ever?). It has become a highly regulated business with heightened exposure, serious penalties and irreversible consequences for those who fall foul of the rules, intentionally or not. Whether landlords stay or leave will depend on their appetite for risk, their ability to adapt and the strength of their long-term objectives.

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Tenants prioritise EPC ratings when choosing a home

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Property118

Tenants prioritise EPC ratings when choosing a home

As tenants increasingly seek more energy-efficient homes, many landlords are choosing to sell properties with lower EPC ratings, according to a new report.

A report by Hillarys reveals a stark postcode divide and EPC upgrade challenge for landlords, with some property types costing nearly £1,400 more than others per year to heat.

As previously reported on Property118, almost two in five landlords (38%) intend to sell their property in the next year, (38%), with energy efficiency requirements cited more often than any other factor influencing their decision to sell.

Larger and detached properties may require greater retrofit investment

Hillarys warn lower EPC-rated properties may become more difficult to let, as 86% of renters are now prioritising energy efficiency when choosing a home, and more than half (52%) are willing to pay a 10% premium for a higher-rated property.

The retail company say lower-rated EPC properties expose tenants to higher energy costs, with an E-rated property (£1,942) costing 313% more per year to heat on average than an A-rated property (£470).

The findings reveal landlords will have to spend thousands of pounds on EPC improvements, as detached properties have the highest heating costs. In the UK, the majority of people live in houses (78%), which are the least energy-efficient and the most expensive property types to heat.

Detached properties are typically the most costly, with detached houses averaging £1,974 per year, more than triple the annual cost to heat an enclosed end-terrace flat (£574).

Hillarys warn larger and detached properties may require greater retrofit investment to remain competitive if tenants continue to choose homes based on running costs.

Small cost-effective measures can improve tenant appeal

Lisa Cooper, head of product at Hillarys, says landlords can take smaller, cost-effective measures that can improve tenant appeal while longer-term EPC work is underway.

She said: “Retaining heat by preventing air leakage at windows is key to ensuring bills stay low and properties warm. Small, cost-effective changes, such as sealing draughts, using thick curtains and ensuring windows are properly insulated, can all help.

“Another great solution to maintaining heat inside is installing thermal blinds, which have a unique honeycomb structure. This clever design traps air within its cells, providing an extra layer of insulation at your windows, reducing heat loss by up to 55%.”

In York, almost two-thirds of homes have an EPC rating of D or below

The study also reveals that more than half of the properties in the top ten costliest areas to heat have an EPC rating of D or lower. In York, almost two-thirds of homes have an EPC rating of D or below, and in Stoke-on-Trent, more than half (52.03%) fall into the same category.

Historic and coastal locations tend to have the highest energy costs, including York (£1,181), Dundee (£1,134) and Bath (£1,064), where older stone buildings and exposure to harsher weather conditions contribute to rising energy bills.

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Government calls on landlords to upgrade homes ahead of Decent Homes Standard

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Property118

Government calls on landlords to upgrade homes ahead of Decent Homes Standard

The government has urged landlords to begin upgrading their properties before the Decent Homes Standard comes into force.

In its Renters’ Rights Act implementation roadmap, the government claims that while the Decent Homes Standard is proposed to come into force in 2035 or 2037, landlords “should commence works earlier”.

The government has announced it will introduce a legal duty on landlords to ensure their properties meet the Decent Homes Standard, and councils will have the power to fine landlords £7,000 if they fail to meet the standard.

Landlords should commence works earlier wherever feasible

The government is currently considering consultation responses and has confirmed it will announce details of the standard and timelines as soon as possible.

As previously reported on Property118, the legislation appears to focus on three key areas when evaluating properties:

• The condition of the premises
• Provisions for tenant safety and comfort
• The ability to maintain an appropriate temperature

In its Renters’ Rights Act roadmap, the government urge landlords to start preparing now.

The guidance says: “While we are proposing a long-term deadline, our expectation is that landlords should commence works earlier wherever feasible, remaining mindful of the effect on tenants.

“As part of the pathway to applying the Decent Homes Standard to the private rented sector, we will implement the review of the Housing Health and Safety Rating System (HHSRS).”

Local councils will have the power to issue civil penalties of up to £7,000

The government also warn landlords they could face up to a £7,000 fine if they fail the Decent Homes Standard.

The government guidance says: “Landlords who fail to comply with enforcement action can be subject to a civil penalty or criminal prosecution. If such an offence is committed, the tenant or local council can also apply to the First-tier Tribunal for a rent repayment order.

“We will be introducing a legal duty on landlords to ensure their property meets the Decent Homes Standard. For landlords who fail to take reasonably practicable steps to keep their properties free of serious hazards, local councils will also have a new power to issue civil penalties of up to £7,000. This will incentivise all landlords to proactively manage and maintain the safety and decency of their properties.”

The fines come alongside the government’s release of new civil penalty tables under the Renters’ Rights Act, which include a £6,000 fine for discrimination against tenants receiving benefits or those with children during the lettings process.

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