This information should not be interpreted as financial, tax or legal advice. Mortgage and loan rates are subject to change.
Category: government and politics
Labour’s deputy leader, Angela Rayner, announces more proposals to support tenants, including bringing back energy performance thresholds for rental properties.
As each political party carves its path towards the general election, Labour are in strong pursuit of the tenant community for votes and have outlined more plans for the Private Rental Sector (PRS).
Energy Performance Certificate targets
At present, by and large, rental properties have to achieve an energy performance certificate rating of “E” or above. Since 1st April 2020 landlords cannot let out new properties or continue to let pre-exiting rental properties covered by 2018 ‘Minimum Level of Energy Efficiency’ standards.
This threshold was the subject for potential change under the “Minimum Energy Performance of Buildings (No.2) Bill” which received its first reading in parliament back in July 2021.
The industry and landlords were preparing themselves for the need to upgrade properties, with buy to let mortgage lenders starting to offer “green mortgages” tailored to those with EPC ratings of A-C.
However, turn the clock forward to September 2023 and Rishi Sunak threw out the plans citing the high costs as being unreasonable to impose in the intended timeframe.
At the time there was already talk of an impending potential change in government, with various commentators suggesting that another party may simply reverse the scrapping of the plans – and Labour have for a long time been seen as the greatest threat to the Tories at the polling stations.
And so it has indeed come to pass. Labour has announced that they intend to require landlords to get their properties up to an EPC rating of C or above by 2030.
Labour have stated they feel that this could save private tenants £250 per year in reduced energy bills.
Green mortgages still feature in the buy to let mortgage space, with lenders offering rate discounts on properties falling within the top three EPC brackets, so whilst there may be some financial benefits, many landlords are likely to be fearful that the costs of getting their properties to that threshold outweigh the benefits.
Adding complexity around this issue is the transition from Energy Performance Certificates to the Home Energy Model, due to be put in place in April 2025. With several moving parts in play, landlords are not necessarily going to know what requirements they have to fulfil for some time.
Bidding wars and upfront payments under Labour scrutiny
Labour have for some time said they intend to stop rental bidding wars if they win the election and this is a message that Ms Rayner reiterated in her recent comments on the private rental sector.
Rental bidding wars are where tenants compete to offer the highest rental amount per month to secure a property.
Rayner also underlined the party’s plans to tackle ‘damp, cold and mouldy homes’ and cap the amount of rent that landlords can take upfront to secure a property.
In the past, Labour has pursued a limit of five week’s rent as a cap for most residential tenancies and six weeks for tenancies of more than £50,000 rent per year, but whether this remains their plan is unclear.
Speaking to the Independent, Angela Rayner said:
Time and time again, the Tories have failed to stand up for renters. From endless delays to no-fault evictions, to failure to sort damp, cold and mouldy homes, the Conservatives are failing working people.
“Labour will call time on a decade of Tory vested interest and put renters first. An affordable, secure private rented sector is vital for economic growth, allowing young people to save for a mortgage with more money in their pockets to spend in the day-to-day economy.
“Our plans will support good landlords but we are calling time on unscrupulous landlords strangling growth.
“Labour will take action to protect renters, with an immediate ban on no-fault evictions, an end to rental bidding wars and extended protections against damp, mould and cold.
“The only real way to make renting more affordable is to build more homes, that’s why we have a plan to build 1.5 million homes over five years as an antidote to Britain’s failing private rented sector.
Renters will be better off with Labour.”
The claim that the Labour plans ‘will support good landlords’ will undoubtedly feel like a hollow promise to many in the PRS.
