UK Finance – the trade body for banks – is the latest group to warn the government to ease energy efficiency targets for the private rental sector.
It says mortgaged landlords’ properties won’t hit the target of EPC rating C or above until between 2037 and 2043 – long after the government’s 2030 target for all tenancies and 2028 target for new tenancies.
And UK Finance warns that yet more landlords may quit the market in large numbers if the target remains unchanged.
The banks say the Renters Rights Bill – set to become law in the near future – will abolish Assured Shorthold Tenancies, meaning the frequency of new tenancies is likely to increase.
“We therefore recommend abandoning the proposed 2028 deadline for new tenancies,” says a UK Finance statement.
“The timescale is challenging and overly ambitious, particularly if many properties cannot be improved on time in an economically viable and cost-effective way. Achieving the 2030 deadline for all tenancies will depend on landlords’ understanding of what improvements need to be made to achieve the standard.”
Practical recommendations include a solar panel discount for landlords and improved export rates paid via the Smart Export Guarantee. It also urges government to give extra discounts to the Boiler Upgrade Scheme for landlords, widen the scope of the Warm Homes Local Grant and/or introduce stamp duty rebates.
It continues: “We believe that a requirement for large up-front investments, due to a disproportionately high cost cap, may result in some landlords leaving the sector or rationalising portfolios. This would simply shift the problem into a different tenure, without resolving the key issue.”
