A number of industry professionals and sector bodies have called on the government to address issues in the country’s rental market in the upcoming Spring Budget.
On Wednesday this week, Chancellor Jeremy Hunt will deliver his first Spring Budget to the House of Commons, in what many are predicting will be a low-key, ‘under the radar’ announcement with little in it to make headline news.
It is highly anticipated that Hunt’s announcement will cover universal credit and other benefit changes, as well as measures such as encouraging retired over-50s to go back to work, and bringing in new rules to stop those with energy prepayment meters in their homes paying higher rates.
So far, there is little speculation regarding any changes that might be in store for the country’s housing market in this Spring Budget, or more specifically in the rental home and buy-to-let sector, which has seen numerous amendments in recent years, mainly tax-related.
Yet some in the industry have come forward to urge the government to take certain steps to bring about improvements in the sector, while protecting it in the interests of the millions of tenants who rely on it for accommodation.
Spring Budget should enforce EPC standards
Skipton Building Society, which provides mortgages for buy-to-let landlords, is one such body that has called on the Ministry of Housing and the Chancellor to bring forward plans in the Spring Budget to improve energy efficiency ratings and minimum energy performance certificates (EPCs) in the private rented sector.
Improving the energy efficiency of the country’s rental stock is a crucial part of the government’s plans going forwards. While increasing number of people are investing in new-builds to benefit from better energy credentials – and increase the prospects of their investments – there is still much to be done.
According to Charlotte Harrison, CEO of Home Financing at Skipton Building Society, the government mustn’t delay its timeline for bringing in stricter minimum EPC ratings, while landlords also need more information on what they can do.
“Delays are bad for everyone. Letting the timetable slip will mean tenants will continue missing out on the opportunities to save money on their energy bills, the retrofitting and home improvement industries will not have the capacity to help landlords carry out all the work needed to meet the targets, and the UK misses the opportunity to reduce its carbon footprint.
“We also need more awareness from landlords on the energy efficiency improvements that their properties need to help reduce bills and support the decarbonising of homes in the private rental market that will address the cost-of-living, energy, and climate crises in the UK.”
One major factor also affecting energy improvements is the cost pressures landlords are facing, which is why Skipton believes the government needs to offer incentives, as well as a decent notice period.
“This could include making energy improvement costs tax deductible or taking it a step further by offering government grants or matching energy improvement spending £1 for £1 for example. Generally, there have been far more incentives for homeowners and social tenants to make their homes green than there have been for landlords.
“If the government are to impose tighter energy efficiency standards on landlords, then we believe that there needs to be a significant notice period. Furthermore, the rules around the cost cap need to be clear and the cap needs to be set at a price which helps drive energy improvements, whilst not squeezing landlords out.”
More cash for the PRS
Another industry body, PayProp UK, is calling for more funding for the buy-to-let industry in the Spring Budget. This includes money towards helping local authorities combat rogue landlords, as well as funding towards processing Section 8 evictions, so good landlords are encouraged to remain in the sector.
Giving local authorities more power to tackle the small incidence of poor landlords would also help to reduce the need for local licensing schemes, which again can be detrimental to those landlords who do follow the rules and operate fairly, and this should be addressed in the Spring Budget.
Neil Cobbold, managing director at PayProp, commented: “As far as the Spring Budget is concerned, the most important thing is to keep the economy stable and to ease the cost of living crisis. But if the Chancellor does find that he has some wiggle room, he should give priority to the private rented sector.
“The PRS amounts to around 20% of the available housing stock in this country and when it faces a crisis, it affects society as a whole.
“We hope he will recognise that with these changes just around the corner, increasing court capacity can give landlords confidence that they can get their properties back within a reasonable timeframe if a tenant does not abide by their tenancy agreement.”
