The surge in support for the Reform party had some interesting ramifications for the property industry last week, writes Nigel Lewis.
National Trading Standards revealed that it had binned its much-talked about Material Information guidance which, as many agents will tell you while rolling their eyes, sought to introduce consumer protection laws into the lettings agency world.
These made all property adverts include the basic information needed to help tenants make an informed choice when choosing a property to rent including the basics such as the deposit and monthly rent, but also some more detailed information on the property and its size, plus the local council tax band and EPC band.
These rules were, like many of the legal structures that hang on limpet-like to the world of renting homes, both unnecessary and toothless and, despite the efforts of the big portals to play ball, often ignored within ‘to let’ listings.
But while few will mourn the passing of the Material Information ‘rules’, Labour clearly sees this ditching them as an opportunity to cut the red tape of Government across England and win some brownie points with voters, many of whom think our nation is too hidebound by box-ticking.
EPC proposals for rental property
Reform and the Tories have been making hay with this since Labour’s landslide electoral victory last year, clapped along by lobbying organisations like the Taxpayers’ Alliance which, if I were to be honest, appear to think Britain would be better without any government or taxes at all.
Nevertheless, such messages cut through. The question is, will landlords and property investors benefit from such a ‘bonfire of the rules’ that Labour is clearly embarking on?
My contacts within the industry appear to think so. For example, one area where the rules are incredibly complicated and bewildering to even the most technically-minded is the much-dreaded EPCs and their doughty regulatory parent, MEES.
Both are the labyrinthine constructs that govern how residential and commercial buildings owners measure whether their properties are energy efficient. And by 2030, all landlords must hold an EPC certificate of at least a band C for all of their properties or be prevented from renting them out.
While a cost ceiling of £15,000 has been introduced to assuage worried landlords, this still represents a huge bill, particularly if your rented property is worth £80,000 and the rent’s just £600 a month.
The trouble is, no one except a handful of technical experts understand how EPCs are calculated. Labour recognises this and consequently is about to overhaul the system after conducting a consultation that finished in February.
A simple problem with a complicated approach
Like Material Information, EPCs are a severely bureaucratic solution to a simple problem – is a property drafty or not?
Sadly, Labour is not going to ‘simplify’ but instead has said it wants to go further than the Tories and make EPCs more – not less – complicated including dropping the ‘headline’ approach – i.e. giving a property a ‘band C’ or whatever.
Instead, a new ream of regulations are to descend on landlords that will see EPCs reflect the myriad types of properties within the private rented sector with different ‘metrics’ for each kind – for example HMOs.
This makes sense in theory and the UK Green Building Council points out it will create an “EPC system that is more dynamic, adapting to technological advancements and changing consumer behaviour to encourage innovation and the adoption of effective solutions which will bring down carbon and address fuel poverty”.
But like many rules and regulations, this is going to be a top-down approach and, following a decade of austerity initiated by George Osborne, means the vast majority of councils have no resources to police the current, never mind a more advanced, EPC system.
I would urge Labour to take a more pragmatic and market-led approach. Namely, make it mandatory for rented properties to include their monthly gas and electric bills in pounds, shillings and pence, covering the past 12 months, indicating the main energy source for the property’s heating system?
If a home is poorly insulated and costly to heat then it will be less appealing to most tenants, and its landlord will be forced to upgrade the insulation and/or boiler in order to rent it out so it is affordable to heat.
Maybe ministers can be persuaded to go down this route, particularly as the hot beery breath of Mr Farage wafts down their necks.
