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Landlords call for rethink on energy proposal for rental properties

The body that represents UK landlords has said the Government should rethink proposals that would force them to pay up to £10,000 to improve energy efficiency in rental properties.

The proposal is that by 2025, all new tenancies in the private rented sector should be in houses with an Energy Performance Certificate rating of C or better.

It further proposed, in the consultation which closed last January, that this standard should apply to all private rented properties by 2028.

Research for the National Residential Landlords Association (NRLA) shows that private landlords make an average net income from property of less than £4,500 a year and say the Government is working on the assumption that landlords are property tycoons with deep pockets.

Older properties present improvement problems

Whilst the sector is still waiting for the Government’s response to this consultation, recent figures have shown the scale of the problem the sector faces in meeting the Government’s ambitions.

Across England over 58 per cent of private rented households have an energy rating below a C. Around a third (32 per cent) of private rented homes are more than a century old, being built before 1919 and some of the hardest to improve.

The NRLA is calling on the amount that landlords should be expected to contribute to be linked to average market rents in any given area (known as broad rental market areas) as calculated by the Valuation Office Agency.

That would mean the amount a landlord would need to contribute would gradually taper from £5,000 to £10,000, taking into account different rental values (and by implication, property values) across the country.

Package of support needed

Alongside this, the NRLA is calling for a package of fiscal measures to support investment.

This should include the development of a decarbonisation tax allowance, no longer applying VAT to energy efficiency and low carbon work and not charging council tax where energy improvements are being made to rental properties when they are empty.

Ben Beadle, Chief Executive of the National Residential Landlords Association, said: “We all want to see as many energy-efficient rental properties in the sector as possible.

Besides being good for tenants, improvements made to rental properties ensure they become more attractive to prospective tenants when being marketed by landlords and agents. However, the Government’s proposals for the sector are not good enough.

“They rely on a misguided assumption that landlords have unlimited sums of money and fail to accept the realities of different property and rental values across the country.

“Ministers need a smarter approach with a proper financial package if they are to ensure their ambitious objectives are to be met.”

For help and advice with commercial property matters, please get in touch with our expert team today.

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