New data has highlighted how almost one in ten properties could become unrentable by 2018, as a result of legislation relating to energy performance ratings.
The 2015 Energy Efficiency Regulations passed in March 2015 set out minimum energy efficiency standards for England and Wales as from the 1st April 2018. From this date any PRS (private rental sector) properties will need a minimum energy performance rating of E on an Energy Performance Certificate (EPC).
The regulations will affect both new lets and renewals of tenancies from this date. All existing tenancies will need to comply as from 1st April 2020.
Landlords who breach the requirement for a minimum E rating will face a civil penalty of up to £4,000, unless there is an applicable exemption.
EPC legislation = a crippled property market?
According to Quick Move Now, however, almost 8% of the rental properties available on the UK rental market currently fall below the minimum requirements – potentially crippling the property market which is expected to face a critical shortage of rental properties by 2025.
A recent press release from the Royal Institute of Chartered Surveyors (RICS) predicted that by 2025 around “1.8 million more households will be looking to rent, rather than buy”. But with landlords having faced a number of legislative changes over the last few years, which has watered down their profits, meeting the EPC requirements may be the last straw – leaving a potential gap in the already over-stretched private rental market.
The possibility of a rental housing crisis is further supported by the data from RICS which found that 86% of landlords have no plans to increase their rental portfolio this year – with that trend set to remain for the next five years.