The UK shouldn’t be held to ransom by private landlords threatening to leave the market due to tougher EPC rules, a senior policy advisor at the Joseph Rowntree Foundation has told a Tory party fringe meeting.
Darren Baxter (main pic, 2nd from right) said that although there needed to be funding available for retrofitting old properties, the government should move very quickly to legislating towards the minimum EPC C.
“If landlords do sell up, I don’t think we should be worried, as landlords sell properties to other landlords or home buyers – you recalibrate supply and demand,” he told delegates.
Baxter clashed with former pensions minister Guy Opperman (main pic, right) who argued that the government should abandon all net zero aspirations in respect of some older houses.
“Landlords will say ‘I have to spend £10-20,000 on a property that brings me £500 a year – I’ll just sell it,” he explained.
“Civil servants are utterly misguided. Shortages will get worse and you’ll get proper poverty in rural communities because people will not even be able to have a rental to start out with. If you exempt all older properties, then landlords won’t have to sell.”
Happier tenants
Opperman told the event – Happier Tenants, More Owners: How can the Conservatives rebalance the housing market for renters and buyers? – that investors could be given a tax break to incentivise building of rental or domestic properties.
He also suggested pension funds should be allowed to build more housing. Opperman added: “We want policy changes – currently councils tend to sell land to the highest bidder so you get poor builds, not long term, or quality housing.”
As a landlord with several EPC ‘D’ properties I will not be threatening to sell up, I will be forced to sell because of the cost of retrofitting is prohibitive without government finance.
A loan would mean I would have to put rents up, probably to out of the reach of the tenants already in the properties. I would also have to evict the tenants so I could get the work done. It just wouldn’t be worth the hassle.
Somebody should ask tenants if they would rather live in D property or be evicted so the landlord could retrofit. The tenants should be made aware that their bills will go down but this will be more than offset by the increase in rent.
Landlords are already selling up and I have people stopping me in the street and knocking on my door because they need a property due to their landlords selling up.
The situation is going to be dire for tenants in the very near future as landlords like me are forced to sell. Only one of my tenants is likely to be able to buy.
So, which family should I make, potentially, homeless first?
Re tenant savings , one of my epc’s suggests spending £18k for a saving of £240 per year 🤣
I use a detailed spreadsheet to include all regular income and outgoings on each property such as service charges, ground rents etc etc. I’m left with a % return on investment (ROI) for each individual property so I can see at a glance which are performing well and not so well.
Using that information should then make your decision about which property to sell first easier… Sell the one that produces the overall least ROI. Of course other things like CGT, Mortgage v no mortgage will also come into play but you should NOT be considering who lives in a property. Just make rational business decisions based on ROI.
Leave social work to the social workers.
We all agree our properties should be as energy efficient as possible – but upgrading properties needs to be efficient in itself. Most of the ‘upgrades’ are simply too expensive & disruptive with too little gain to make them worthwhile.
In fact, until the EPC algorithm actually measures efficiency instead of cost, until LLs are clear what needs to be done to achieve the required efficiency & the Govt actually clarifies what & when these upgrades need to be done, LLs will not throw good money after bad.
As a landlord with all EPC C, thanks Darren Baxter for your proposal that will send all my rents up another £200 to £300.
Unfortunately, the hundreds of thousands of tenants who will be put out on the street because of this will soon regard you as an absolute fruitcake.
I echo your sentiments… EPC plans have been around for over 10 years the only change was speeding up implementation.
I took steps over the last decade and sold all my old properties. I now ONLY own / buy modern (1990’s and beyond) All the portfolio same as you are C or above and I have just one “Modern” D rated flat that will be upgraded with new boiler / insulation etc next year then like you I will sit back and reap the rewards of a good investment strategy.
I would advise investors do as suggested by Darren Baxter and rationalise the portfolio, get rid of any old properties and re-invest in modern.
This is the problem with Policy Advisors they sit behind a desk and have no real life experience.
The EPC improvements are a public good, however frankly I don’t where to start. I have done my research. I already have double glazing, gas combi boiler, low energy bulbs and roof insulation. Any other measures are not possible or practical.
Why are n’t home owners expect to improve energy efficiency? The burden of climate change should be shared.
We are a crossroads, where I won’t be able to evict my tenants. Then there are the tax increase. Rising mortgage rates, making tax digital, electric upgrades and all the regulations.
Even after paying income tax, capital gains tax…. there is inheritance.
Right now from the perspective of a property professional, people like me who are looking to sell up are faced with capital gains tax. Once, I pay the 28% tax, what incentive is there to re-invest the money?? Al it does is encourage people to spend it, rather then invest in a differrent business to create wealth.
It looks like I’ll have to sell some of my properties if the EPC proposals come into force. I doubt if I’ll have any other option than to sell. I’d really rather not sell up – but it’s going to be too much money and effort to upgrade my D properties to Cs.
I’ll be spending my money on holidays abroad while my tenants will be, more than likely, homeless.
I know for sure that there are not enough ‘council’ houses in my area for the 7 families I will have to evict, and with other landlords already selling up I really hope the Policy Advisors and others who are so against landlords have an answer (and some spare houses).
Yep you are correct.
Sell up and then hide the cash from prying eyes like HMRC.
The new Labour Govt will be coming after wealth.
If you have cash HMRC can’t detect it.
Keep it hidden.
Pay your bills with cash.
Beat the system by using cash.
Why is it only Let out homes that may in the future require an EPC rating of C or above ?
Should all homes not be included, if energy efficiency is such a problem?
I believe the EPC rating certificate is being changed in 2023 to perhaps include heating appliances, which in my view is different from the energy efficiency of a building for which the current EPC was designed for.
I wonder if the way in which the house is rated will change to suit the new EPC or what ever the new name is . . .
I think you’ve raised a good point there. Will the new EPC requirements be changed so that a current D will become a C? I really hope so for my tenant’s sakes.
It is clear the EPC requirements are to drive LL out of business.
Govt will never mandate for all properties to be EPC C status.
How would they do so!?
They won’t as they would lose the next GE!!
Appreciate that most LL know what is going on with EPC C status.
However there really are some clueless LL out there.
A LL a street away from me has just spent a lot on refurbishing a property to produce a 5 bed HMO property with an en-suite in each bedroom
Current Council Tax is £150pcm.
But the VoA isn’t aware of what this LL has done.
When they find out Individual Council Tax Banding will be applied.
Probably at about £70 pcm per room
Now this is the kicker; despite having spent a lot the EPC status is D!!!!!!!!!!!!!!!!!
Currently the HMO makes £42000 gross per year.
When EPC C status occurs which is most likely this HMO will be unlettable if just one tenant changes in 2025
Can you believe a LL would be so stupid!!??
This dopey LL has now put the property up for sale
I think he may have realised the giant ####up he has made.
But the idiot is asking about £100000 more than a normal 5 bed which is what the property will be in 2025.
Absolutely bonkers this LL.
It is clear that EPC C status cannot in many cases be an affordable situation.
It is simply unviable for many properties to be fitted out to EPC C status.
As has been suggested selling up is the only solution.
Some LL may move to other letting business models like FHL that aren’t………………..currently required to be EPC C status.
Govt DOESN’T seem to have worked out yet that if LL sell up few will be bought by other LL.
They will be bought by up and downsizers or those still residing in familial homes probably saving up to buy.
No tenants will be buying because nothing has been stopping them from buying now.
LL selling won’t magically find tenants doing the buying.
As yet Govt hasn’t advised tenants where they can live once the LL has sold the rental property
Surely someone in Govt must realise the total stupidity of requiring EPC C status for rental property!?
There will be mass tenant homelessness.
This situation will result in anarchy.
Where will millions of homeless tenants go!?
This EPC stuff is complete nonsense.
I most cases all a tenant has to do to keep warm is put a jumper on!
We have owned 9 flats since the 1970’s that we rent out. There have been ups and downs over the years and lots of changes in the regulations. However, the EPC C regulation is just a step too far and will force us to sell the properties, adding to all the other tenants being forced to move and trying to find a new home in an increasingly diminished supply of rental properties at increased rents. In theory, better EPC ratings sounds like a good idea but in reality this is going to lead to dire consequences for thousands of tenants who are quite happy in the properties they are in now, even if they aren’t C rated.
Berlingo, I totally agree with your thoughts on this. I don’t want to sell my D houses, but will be forced to do so, and will make sure I tell the tenants why I have to sell them.
Most of my houses are in the North East, so spending 10k on upgrading the ones that are a D and the ones that are currently a C which may change in the future is 2 years rent, minus expenses and these are all mortgage free, ive no idea how anyone with a mortgage will cope.
My family live in houses with an E rating and cant afford to upgrade them.
The current government seem to want to abolish the PRS and this EPC C is going to wipe off millions of houses in the north of England. Not sure how they are going to call it leveling up?
If they look at what has already happened in Ireland and is now happening in Scotland and creaping down to the UK, they are going to be in a hell of a mess trying to house homeless people very soon.
There will be more low EPC houses available for first time buyers if they can get a mortgage on them, lenders currently talking about not giving them to low EPC rated properties, or higher rates.
Really feel sorry for tenants looking for a house these days.
I don’t even need to advertise these days. they are gone well before putting them on the market. Neighbors popping their heads over the fence to ask if its for rent.
Come EPC C days and PRS landlords sell up, its going to be brutal
We aren’t there yet in the UK but eventually we will be like Ireland
750 rental properties for a population of 5.5 million!!
So about 12000 for the whole of the UK.
It only took about 4 years for this to occur.
About 150 viewers for a 1 bed flat in Glasgow.
It is clear that if Govt attacks continue with the bonkers policies they are introducing then Ireland will be the way the UK will go.
Of course when rather than if Labour are the next Govt the order of magnitude of attacks on LL will make the Tory attacks seem like nothing.
Labour will fast track the destruction of the PRS.
LL are doomed.
Labour intends to properly eradicate LL.
Perhaps someone could explain to me/us why the Gov’t is relentlessly disadvantaging PRS LL’s?
If it is to win the tenant vote, they are very much mistaken, as vast numbers of tenants are booted out by selling LL’s, and those that remain facing massively increased rents to cover the myriad of additional costs and risks. If that were me, the very LAST thing I would do is vote for a Gov’t that had made me homeless, or hugely increased my rent.
With a cost of living crisis, they are unnecessarily increasing costs. The tories really don’t seem to have a clue these days about economic, or political, reality. They have replaced Boris Johnson and Rishi Sunak, with the totally naive and incompetent Truss and Kwarteng – dear oh dear – and Trussenomics, so far, has caused a run on the £, vastly increased interest rates and decimated mortgage availability, and had the UK’s credit rating downgraded! That takes some doing in 4 weeks, and that’s before you consider the immense damage they have caused their party with the 45% fiasco.
This Gov’t aren’t so much shooting themselves in the foot, as machine-gunning themselves all over – the Labour Party can’t believe their luck!!
Old housing stock, particularly the pre 1919 nine-inch solid wall terraced type stock, was inherently the first choice for many BTL ‘investors’ in the mid 90’s as it was relatively cheaper and offered a good ROI. I used to buy this property type in the 80’s / 90’s to renovate, live in and sell on and that provided a good insight to the work that was necessary to bring these up to date. Consequently, when building up my BTL portfolio I avoided the pre 1919 stuff for obvious reasons. The general move to improve the thermal efficiency of housing has been around for some time particularly through the building regulations for new build.
The BTL market in the areas I work in is mainly pre 1919 housing stock that has been let out since the mid 90’s at rent levels that can be described as very healthy that have obviously provided, and still do, good ROI rates.
Any business will require reinvestment overtime to ensure it is up to date and competitive otherwise the future is not guaranteed, and the business could fail. EPC’s last for 10 years! The properties I originally purchased were all rated D, and now they are all C, with some targeted long term to attain a B.
I use the analogy of housing and cars to understand the evolution of product improvement and efficiency and now quite happy to drive a fuel efficient, less polluting, and safer vehicle than I did when I passed my driving test in the late 70’s and equally live in a well insulated and fuel efficient home.
Business is business and politics is politics the two don’t go together, therefore individuals must use their business acumen and make decisions accordingly as they did when they started out in BTL.
Perhaps it would help in the debate if the actual number of older housing stock properties that will require improvements in order to meet the proposed minimum EPC standards is established to give a better perspective.
For the vast majority of leveraged LL the terrace house was the standard investable rental property.
Now these are duds due to EPC C status requirements.
These properties are the ones LL need to sell off to mug FTB.
The tenants will be homeless, hundreds of thousands of them.
I thought Truss was going to get rid of EU regulations.
EPC requirements should be one of them.
my personal property was built in 1902, (not one of my rentals), however, because of the 18 inch think solid dressed stone finish walls, this house is impossible to get an EPC rating of C or below. I am NOT wrapping it, as it will lose all its character and it cant have cavity wall insulation
what I think the Government should be doing is, have a different EPC rating for properties built before, say the 1990, before 1990 EPC rating of D and below, EPC rating of C and below after 1990
an EPC rating of C is just a step too far for my properties, and I will probably sell up
John Doe, I believe the government are very short sighted, they only see how many people rent and how many landlords there are, they want votes to get them into power.
When the tides turn and they loose the PRS and fail to build houses and tenants can not get a house, they may have to rethink.
If it’s bad now, god help us when labor come in with the next election. I think that between Boris and Truss the Tory’s have made such a mess of it, no one will vote for them in the next election and combined with EPC C landlords will be selling up.
Guess I’m kind of lucky as my houses are 2 or 3 bed semies/ terraces houses but some are non standard construction, so they will have to be sold. currently only buying newer houses that can be a C rating, but rents are going to be higher and because of the amount of interest I get, I don’t need to entertain people on housing benefit or overseas tenants,
just too much to go wrong.
Not sure why the government are only listening to charities, shelter and generation rent. If that is the case, then fully expect your plans to be wrong as you have not looked at the whole picture, and spoken to other relevant parties such as the NRLA.
I am still laughing at how Shelter and Generation Rent predicted mass evictions when the eviction ban was lifted. Never happened, so its fair to say such organisations are not to be trusted.
Furthermore, I read an interesting statistic yesterday, where there are 50% homes less available for renting in 2022 compared to 2019. So clearly Landlords are leaving in quite serious numbers, and this is not including even more proposed legislation. I know myself and many landlords, have stopped investing in purchasing further properties, and will look at investment opportunities elsewhere.
Maybe this government don’t care anymore as it’s looking more likely that a Labour government will be in power when the proverbial hits the fan over this.
They’re deluded if they think traditionally Labour voting renters will switch to voting Conservative just because of the anti-landlord policies they are introducing. Not only that, they will be losing votes from some landlords who normally do vote Conservative. I know me and my family won’t be voting Conservative at the next election if this EPC C policy is drafted into law.
Yesterday, I informed my tenant of 7 years that I am to put the property up for sale from April next year. I’m getting out of the rental business. I bought two properties when I retired early from work. They were to provide me and my family with an income and an investment to pay off my home mortgage when we come to sell them. They’re not leveraged highly. I sold my other one earlier this year, a CPC D property which cannot easily be upgraded. The tenant was another long-term tenant with a family. I feel bad for both but what else can I do with all the restrictions coming down the line? I’ve taken a part time job which has all but replaced the income I have lost. Thankfully I’m still fit enough to do so. It’s an absolute farce.