The professional membership body says it has responded to a recent consultation by the UK government on this issue and based on 350 written submissions from property professionals across England and Wales and roundtable discussions with member agents, Propertymark was able to convey the concerns and thoughts of the industry.
The Department for Energy Security and Net Zero (DESNZ) consulted on views of the UK government’s intention to alter the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 that help improve the energy efficiency of certain private rented property in England and Wales. It also sought opinions on alterations to the Energy Act 2011, a law which sets out the arrangements for and financing of energy efficiency improvements to be made to properties by owners and occupiers.
In response to the consultation, Propertymark stated that it supports efforts to enhance the energy efficiency of homes, but the targets must be realistic and achievable.
Reform of the EPC metric system is also being looked at by the UK government, but it must work for the entire sector, considering the varying nature of property types throughout the country and the fact that properties in the private rented sector are generally considerably older and of lower value than the rest of the market.
Propertymark states that it is concerned that the proposals will create substantial disruption in the private rental sector as landlords face high bills for energy efficiency enhancements.
Additionally, there are concerns that many landlords will struggle to afford the new proposed cost cap, and that many landlords, whether they have large or small portfolios, will not be able to make the necessary changes to their property to meet the new standards. Some Propertymark members anticipate a substantial number of landlords will leave the market.
The UK government’s proposal is to increase the maximum required investment for the private rented sector MEES to £15,000 per property before an exemption can be registered. Propertymark believes £5,000 per property is more realistic and reflective of the resources available to landlords and would achieve the balance with landlords’ affordability and higher costs.
During Propertymark’s evidence gathering process, a large agency in the West Midlands explained that £15,000 is a wholly unrealistic sum to spend on improvements for each property they own, and that as a consequence, many landlords will exit the market.
Furthermore, Propertymark believes that the timeframe for implementation should be relaxed for both new and existing tenancies. Landlords need longer to implement these measures and spread their costs, and this would also enable the industry to recruit and train the number of tradespeople needed to undertake the work. Propertymark also recommended incentives to encourage landlords to decarbonise their properties before the deadline to support capacity with energy installers.
The UK government’s favoured implementation timeframe is to require ‘new tenancies’ to achieve the higher standard from 2028 and ‘all tenancies to meet the higher standard by 2030.’
One agency from the South West provided insight to Propertymark, stating that there are so many properties that will not be able to reach EPC C that any benefit will be outweighed by the size of the exemptions list, and the number of properties that will be withdrawn from the market.
Timothy Douglas, head of policy and campaigns at Propertymark, said: “Propertymark wants to see more energy efficient homes, but the targets must be realistic and achievable. We have long said that the UK government must do more to understand the finances of landlords and introduce measures that take into account the diverse nature of property types across England and Wales in the private rented sector.
“The timescales for implementing these changes will be key with recent legislative change in Wales and new proposals via the Renters’ Rights Bill in England. We look forward to continuing to engage with the UK government on this issue, but it is vital that EPC reforms are clarified first and given time to bed-in, until we have sufficient numbers of skilled tradespeople in the market to carry out upgrades, and so that policymakers recognise the huge costs in doing works particularly the impact on landlords with lower value properties.”
