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Under the skin of the letting market

Here we share news and views on both the local letting market in & around Oxfordshire and all planned and recent legislation.


Could ‘F’ and ‘G’ rated homes be banned?


 

Chris Huhne MP is in the news quite a lot at the moment, most of it not regarding something potentially quite important for landlords: the Green Deal.

If you remember, this proposed legislation aims to improve the energy efficiency of the private rental sector.

The idea being that landlords can borrow the funds to upgrade their homes’ energy efficiency and repayments are made via higher fuel bills over the next 24 years.

So recent news is this:

  • From 2018, a property with an EPC grading lower than ‘E’ will not be legally allowed to be rented.

The Government estimates that over 680,000 homes are currently ‘F’ and ‘G’ rated and so will be affected.

This is classic case of where a good idea in theory becomes more complex in practice:

–         Tenants may not be happy to pay higher fuel bills for upgrading which they may not have asked for

–         Landlords of ‘F’ and ‘G’ rated property may decide to sell rather than upgrade, hence decreasing the supply of property available

–         Some old properties may face real difficulty in moving up to an ‘E’ rating. For example, old windows are influential in the final EPC grade yet very expensive to replace, particularly in conservation areas.

–         There are questions over how the legislation is policed

If this legislation remains – and the Green Deal faces a tough challenge trying to improve rental stock with zero incentives for landlords – then landlords are going to have to think about the rating of their properties.

A good letting agent should be able to advise clients on how to manage the property up and towards the ‘E’ rating.

Meanwhile we shall see how and if Mr Huhne stays around to see the legislation through Parliament.