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  • Property Yields

    Energy efficiency 2018 - threat to landlords



    It is believed that around one in 10 buy-to-let homes will be un-lettable next year unless landlords take steps to improve their properties' energy efficiency.

    New laws that take effect in 2018 will make it an offence to let out properties with the worst energy efficiency ratings. 

    The legislation states that landlords must not let out properties with the two lowest energy efficiency ratings, F and G, after April 2018 at the latest.

    According to the English Housing Survey, 11.4% of homes in the private rented sector were rated F or G in 2011.  I have heard figures as high as 35% of PRS properties will not comply.

    There has been much confusion around the Green Deal so I talked to John Stewart of the Residential Landlords Association to gain some clarity:



    ​Although the government has stopped funding the Green Deal Finance Company, which was set up to lend money to Green Deal providers, you may still be able to get Green Deal funding from providers financing the scheme themselves.

    The improvements that could save you the most energy depend on your property, but typical examples include:

    • insulation, eg solid wall, cavity wall or loft insulation
    • heating
    • draught-proofing
    • double glazing
    • renewable energy generation, eg solar panels or heat pumps.

    Landlords can also do simple inexpensive things, like changing lightbulbs and down-lighters for LEDs.

    Many LEDs have a rated life of up to‎ 50,000 hours. This is approximately 50 times longer than a typical incandescent, 20-25 times longer than a typical halogen, and 8-10 times longer than a typical CFL. Used 12 hours a day, a 50,000 bulb will last more than 11 years‎, which saves you the hassle of having to change light bulbs when tenants complain about them failing.  Tenants will also appreciate the saving on their utilities bill!

    If replacing a boiler, it is worth the extra expense to fit an “A” rated one that comes with a 10 year warranty.

    See - Top tips for up-grading a rental property 

    With strange timing, I received the below press release today, which suggests that this topic is on the radar of agencies and other interested parties:

    Private tenants living in cold out of fear of eviction

    Housing tenants in the private rented sector are choosing to live in cold homes out of fear of high heating bills and losing their tenancy, according to new research.

    The research, carried out by Sheffield Hallam University and funded by the Eaga Charitable Trust, an independent grant-giving trust committed to combatting fuel poverty, was developed to provide a better understanding of the lived reality of energy inefficiency in private rented sector housing.

    The private rented sector is the fastest growing tenure in England. It houses a higher proportion of poor and vulnerable households than any other tenure and contains a higher proportion of the least energy-efficient properties.

    The research, which focused on private rental sector tenants across two areas of England, Hackney and Rotherham, revealed that tenants face considerable barriers to seeking help with cold homes that are unaffordable to heat. Respondents in both locations experienced dangerously cold homes and rationed their heating in winter due to energy inefficient properties and fears over high heating bills.

    The stress of maintaining a tenancy - particularly given the high demand for rental properties - meant that few respondents considered how easy the home would be to heat when finding somewhere to live.

    The relationship between tenant and landlord was one characterised by fear on the part of tenants that any complaint may be countered by retaliatory action such as rent increases or eviction if they spoke out. Most tenants felt reluctant to make contact with their landlord and instead found ways to work around problems.

    Keeping warm by routinely wearing coats inside the home, keeping blankets in living areas and spending extra time in bed or outside of the home were common practice, as was heating the home for very short periods in order to save money, rather than lobbying landlords for improvements.

    Issues such as excess cold, condensation, and extensive damp and mould were widely highlighted, with respondents also highlighting increased suffering associated with chronic health conditions (i.e. respiratory diseases and arthritis) known to be exacerbated by cold homes and the emotional strain of insecure tenancies and living properties they wouldn't have chosen to live in.

    Over half of participants used pre-payment methods to pay for their heating and therefore paid higher tariffs, but despite this, many valued pre-payment meters as a method of controlling spending on heating and electricity.

    Under the Energy Act (2011), tenants are able to request consent from their landlords to carry out energy efficiency improvements to properties. The landlord cannot unreasonably refuse consent. It is, however, the responsibility of the tenants to arrange funding. Although the majority of respondents were supportive of the Act in principle, the majority felt too afraid to approach their landlord about this.

    Dr Aimee Ambrose, senior research fellow from Sheffield Hallam University's Centre for Regional Economic and Social Research (CRESR), led the project.

    Dr Ambrose said: "There is a key voice missing from the debate about energy performance in the private rented sector: that of the tenant. Tenants are under-researched and underrepresented, lacking a collective voice due to the absence of organised groups representing them.

    "The picture emerging from the accounts of respondents is one characterised by limited housing choice that leads to the acceptance of poor quality properties that would otherwise be unacceptable, to fear of challenging the landlord in case of retaliatory action, to enduring cold conditions and high bills, and to suffering the consequences for health and wellbeing.

    "This research represents a decisive step towards a stronger voice for tenants in the debate about energy efficiency in the private rented sector."

    Dr Naomi Brown, manager of Eaga Charitable Trust, said: "This is highly significant research which is hard-hitting in its depiction of the challenges that tenants in the private rented sector face. 

    "The Eaga Charitable Trust is very pleased to have funded the research and hopes that it will influence positive changes to enable private tenants to live in warmer, healthier homes."

    You can read the executive summary here or the full report here.

    SEE ALSO  -          Green Deal warning: Don't end up with an un-lettable property by 2018!

    UP NEXT -              Green Deal ongoing problems etc

    DON'T MISS -        "Industry Exclusive* Interview with Rt Hon. Gregory Barker, about the Green Deal.

    NOW WATCH:  



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    It is actually in the best interests of the LL to ensure that the tenant complies with the AST requirement to keep the property warm when climatic conditions require so

    An unheated home in cold periods cause severe degradation of the property.

    This then reduces the amenity and inherent value of the property.

    The LL then has to decide to get rid of tenants who refuse to heat the property due to lack of money and the amount it costs to heat.

    It makes economic sense from the offer perspective that the LL is able to provide a rental property which is affordable to heat.

    That will satisfy both parties.

    Govt could really encourage energy improvements by allowing ALL of them to be offsettable against tax.

    To remove any VAT costs

    To offer energy loans at say 1% to enable LL to afford improvements with the loan of 1% being secured against  the rental property and not subject to personal credit checking .

    Even my EPC D rated  flat suffered mould whilst the heating wasn't working for about a week and ventilation was inadequate, it was bloody cold at the time.

    Now the heating works and ventilation is used and no mould.

    Having a warm and dry home should be an achievable aspiration shared by the LL and tenant alike.

    Given the financial incentive many LL would take up my proposals if Govt offered them

    We need to get away from grants etc only being for those properties with HB tenants occupying.

    Everyone should be able to achieve Govt assistance to achieve higher energy ratings.

    I doubt that many LL are even aware of these EPC issues and certainly few tenants are.

    I have never been asked if my properties are F or G standard,!

    I see many LL advertising properties that are this current standard.

    Do they not realise that a liitle over a year and they will have to evict if an EPC E standard hasn't been achieved!?

    It seems many LL are as clueless about the EPC requirements as they are about S24 etc.

    I pity the poor old tenant who will have to be booted out whether the LL or tenant wishes it or not.

    I can't see many tenants paying out to improve a rental property.

    LL need to have a thorough review of their property circumstances and seriously consider the viability of properties that are currently F and G

    It might be that along with S24 it might be worth getting rid of to an OO.....................................who will NOT be subject to the EPC regulations!!!

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    I have purchased property with Low EPC and I have upgraded them with new windows new Boilers ect ect

    do I have to wait until the old EPC expires before I apply for a new one

    Or do I have to have a new one in place with the start of the new regs

    or do I have to do a new EPC when I have a change of tenant

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    Learn Change and Adapt ?????

    When you have major energy efficiency works completed you need to renew the EPC as the existing one is now inaccurate and so you would be falsely describing the property when you put it up for rent.

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    The description would say it had an EPC of (using one of my properties as an example) G. That would be correct, as that is what the certificate says.

    You could get a new EPC whenever you want. I did, and the rating went to D, just as a result of the refurb I did 2 years earlier.

    Of course if tenants cared about EPCs I could have got an new one just after the refurb, but they don't so I didn't.

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    The new EPC would be required for a new tenancy that commences after April 2017.  Existing tenancies can continue with the old EPC rating until change over of tenancy when up-graded EPC required.

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    Thanks you for that Regards DL

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    Learn Change and Adapt ?????

    DL

    Interesting that you have successfully improved your EPC rating

    What was the average cost per property and did you receive any Govt or other assistance because some tenants were on welfare?

    If one has 10 properties to improve to E standard would the average LL be able to afford to improve them?

    I reckon £4000 per property

    I doubt many LL have £40000 in loose change down the back of the sofa!?

    So what will they do!?

    As you are probably aware the EPC D standard requirement comes a few years after E

    Have you assessed what it would take to achieve that!?

    Then a few years later the C standard

    Then the B standard!?

    In about 10 years most UK rental stock will not meet the newest required EPC standard

    What will you do then!?

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    I think I had a bit of luck here ?? over the past few years

    A lot of my customers are on low income but are working and I found that because they were on certain benefits I was informed that they could have new boilers solid wall insulation Cavity Wall Insulation and the removal of Night storage heating all at nil cost to my self

    I have upgraded property because they had old central heating systems and wooden windows so it was part of my plans when purchasing property to make it energy efficient

    We had a scheme in the NE which was the removal of Night storage heaters and a replacement with Gas all at no cost the only criteria was the Tenant had to apply and they had to be under 25k household income

    I reckon I have saved over 200k from the use of grants since 2014

    all of my properties will pass the new regs most will D to C now which is a good result

    But the grants come and go and keeping up to date is hard but I do go to NLA meetings and most have come via that avenue

    But I was just lucky right time right place

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    Learn Change and Adapt ?????

    Your example was exactly the point I was alluding to.

    Without your good fortune you would have been in the situation where your portfolio was unviable.

    There must be many LL of the 640000 rental properties that are not currently E standard who have these EPC millstone properties around their necks.

    You would have been one of them had you not been as astute and tightly managing your properties as you have clearly done.

    There is simply no way even you could have afforded £200000 on the EPC improvements.

    So the average incompetent and disengaged LL has done nothing to fix their rental property to achieve at least EPC E standard!

    Only about a year to go and then what will these idiot LL do!?

    Will Govt actually enforce the EPC E requirement and force LL to evict!?

    If they do how long would it take for 640000 evictions to take place if Govt insists on compliance!!??

    In all seriousness I simply cannot see the E requirement being complied with

    Will it be illegal to market a rental property which doesn't meet the EPC E standard unless exemption has been obtained!?

    Surely this EPC situation makes S24 a minor detail and yet nobody seems to be mentioning it

    I have for years, but I am a very little voice in the greater scheme of things!

    It has been conjectured that by triggering Article 50 to leave the EU the EPC requirements will be scrapped by the Govt

    I guess a lot of LL will be hoping that is the case!




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    when EPC came out I asked my Council who will enforce them if a Landlord did not have a EPC

    The answer was will only react if we receive a complaint  I don't know of any Landlords who have been investigated

    This is going to be like driving with a phone in your hand Its against the Law but there is not enough cops on the road to enforce the law

    EPC will be the same Local Councils are under huge cutbacks and they are laying off staff

    So I have to ask the question who will enforce this when it comes in

    This is badly thought out but what else can we expect with a EU regulation

    A bad law is a one you don't enforce


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    Learn Change and Adapt ?????