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EPC C targets should not require landlords to raise rents claims government

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EPC C targets should not require landlords to raise rents claims government

The government claim landlords will not have to raise rents to meet EPC C targets by 2030, despite a government consultation claiming the opposite.

Under the Warm Homes Plan, the government announced all private rented properties will need to meet EPC C targets by 2030.

However, a government consultation on meeting EPC C targets admits landlords may sell up or increase rents due to EPC rules.

Our proposed changes should not require landlords to increase rents

In response to a written question from Conservative MP Paul Holmes on “whether the government has made an assessment of the potential impact of the costs of new energy efficiency measures on the level of open market rents.”

Martin McCluskey, Minister for Energy Consumers, said landlords would not need to raise rents.

He said: “The government recently consulted on increasing minimum energy efficiency standards in the domestic private rented sector, including proposals for rented homes to achieve Energy Performance Certificate C or equivalent by 2030.

“We have engaged with landlord and tenant groups in developing this policy and set out several proposals to help landlords reach the new standard.

“Our proposed changes should not require landlords to increase rents. Instead, they will help tenants cut their energy bills by delivering more energy-efficient homes.”

Landlords may decide to leave the market

However, as previously reported on Property118, a government consultation documents admits some landlords could choose to sell rather than comply with EPC rules.

The document says: “Landlords may decide to exit the market. The likelihood of this is dependent on the current profitability of their rental property, the level of costs they face, the price landlords would receive from the sale of their property and their wider financial circumstances.

“The prices of EPC F/G PRS properties affected by the current regulations (requiring PRS properties to be EPC E) decreased by about £5,000 to £9,000, relative to unaffected properties.

“If a similar situation were to arise in the context of higher Minimum Energy-Efficiency Standards (MEES), landlords may decide it is more profitable to improve properties and remain as landlords. However, landlords who face the highest costs may decide, on balance, it is still less costly to sell their property than comply with the higher energy performance standard.”

The document also says some landlords may also decide instead to pass costs onto tenants through higher rents, but some tenants may decide to stay if higher rents are offset by lower energy bills.

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