Our round-up of news items over the past week.
This week we focus on the current issues facing the private rented sector including the exodus of landlords moving into short term or holiday lets, as well as the energy efficiency reforms. We also have a look at Propertymark’s recommendations for the Renters Reform Bill.
Government energy efficiency reforms may need a re-think warns NRLA
Proposals for landlords to pay up to £10,000 to make energy improvements in line with Government targets may require a rethink or a change in strategy warns the NRLA.
Currently, the Government has proposed that all new tenancies by 2025 will have an EPC rating of band ‘C’ and in all existing tenancies by 2028.
As part of this the Government has suggested that in meeting these targets, landlords should be expected to pay up to £10,000 to make the necessary improvements to reach band ‘C’.
However, with NRLA research showing that the annual new income for landlords is less than £4,500, the association has warned that it is a misguided assumption that landlords have enough money to cover the type of investments needed for the new proposal. In England, 58% of privately rented properties have an EPC rating lower than band ‘C’.
The NRLA are calling for the amount that landlords should be expected to contribute to be linked to the market rent of the area the property resides in. Alongside this, the NRLA are also arguing for a package of financial benefits for landlords who wish to make energy improvements, such as a decarbonisation tax allowance, no longer applying VAT to energy efficiency and low carbon work and not charging council tax where energy improvements are being made to rental properties when they are empty.
Ben Beadle, the NRLA CEO said:
We all want to see as many energy-efficient rental properties in the sector as possible. Besides being good for tenants, improvements made to rental properties ensure they become more attractive to prospective tenants when being marketed by landlords and agents. However, the Government’s proposals for the sector are not good enough.
They rely on a misguided assumption that landlords have unlimited sums of money and fail to accept the realities of different property and rental values across the country.
Ministers need a smarter approach with a proper financial package if they are to ensure their ambitious objectives are to be met
District Council Network reveals a growing movement of landlords moving towards Airbnb’s
Over the past few months, we have highlighted on the Newsround the growing migration of landlords moving to short term or holiday lets due to the financial benefits. This is causing problems within the PRS as there is less housing stock, leading to significant waiting lists.
A report was released this week by the District Councils Network which highlights this current problem. The report revealed that landlords selling up or converting the property to short lets is having a large effect on the current market. 76% of local authorities revealed that this practice had caused a rise in housing waiting lists and 48% of these councils said that they were now experiencing pressures on housing services due to this.
This problem is exacerbated in areas where tourism is prominent, such as in the south-west of England like Cornwall and Devon. One council in a popular tourist destination had seen a nearly 80 per cent drop in the number of long term rental properties available in their local authority area over the last three years.
The District Councils Network, which represents around 200 local authorities have called for the Government to increase investment in council housing and give councils the tools they need to create their own permeant housing for people in their communities in hardship. Council housing would better help the offset in long term housing for tenants.
Propertymark’s recommendations for the future of renting
This week, Propertymark released their recommendations for reforms to the private rented sector.
With the Renters Reform Bill likely to be published sometime in 2022, a panel consisting of significant members of the private housing sector (such as Ben Beadle, CEO of NRLA and Timothy Douglas, Policy manager at Propertymark) have come up with a list of policies which they believe should be added to the bill.
While the full report can be read here, here are a few significant highlights of the recommendations:
- Review taxes affecting landlords to find solutions to support future investment in the sector whilst avoiding rent control.
- Extend redress membership to landlords who self-manage property only.
- Central government should take the lead in funding, developing and running a national landlord register, whilst working in partnership with local authorities
- Lifetime deposits should include a range of ‘passporting’ options and explore requirements to have a written tenancy agreement and inventory.
- Support the sector to reduce its carbon footprint through setting achievable energy performance targets, providing grants and using tax breaks to incentivise landlords to finance energy efficiency improvements.
Shelter report urges Government to do more about the exodus of BTL landlords
Research by Homeless Charity Shelter has urged the Government to support buy-to-let landlords in order to reduce the current problem of homelessness in the UK. There are currently an estimated 274,000 people who are homeless in England.
The charity also argues that the end of the Covid protections, which included elongated notice periods and an eviction ban, alongside cuts to universal credit and rising living costs has meant that a greater number of tenants are now at risk of becoming homeless.
Eleanor Bateman, Policy officer at Propetymark said:
Figures for the number of people in temporary accommodation published in Shelter’s latest report are a stark reminder of the undersupply of homes to rent in this country, and the affordability issues that this exacerbates.
A historic lack of funding in the social rented sector, coupled with the many legislative pressures placed on the private rented sector in recent years have given rise to this situation, and drastic changes are now crucial.
Crackdown on dodgy directors
At last, it looks as if some action may be taken against directors who dissolve companies in order to avoid paying their debts. The Insolvency Service has been granted new powers under The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act to investigate directors of dissolved companies.
If misconduct is found, directors can face sanctions including being disqualified as a company director for up to 15 years or, in the most serious of cases, prosecution.
Business secretary Kwasi Kwarteng said:
We want the UK to be the best place in the world to do business and we have provided unprecedented support to businesses to help them through the pandemic.
These new powers will curb those rogue directors who seek to avoid paying back their debts, including government loans provided to support businesses and save jobs.
Newsround will be back in the New Year.