The Secret Landlord Green upgrade is a farce

Why there is no point in owners making eco improvements in the private rental market

The rental market is in trouble – and it’s going to get worse.

In five years’ time, proposed new energy performance certificate ( EPC) regulations are expected to kick in. That will mean every rental property has to meet a C grade.

The government consultation closed years ago, but clarity is nowhere to be found. There was talk of potentially a sliding scale according to rent and a £10,000 cap on the cost of making energy efficiency improvements (whether you make the grade or not). But that cap is the same whether you own in Mayfair or Middlesbrough.

And here lies the problem: upgrading low-value properties is not worth the investment. Ask any tenant if they would prefer an E- rated roof or a C-rated roof over their head, and my bet is that they will take any roof if it means they have somewhere to live.

Of course, the Government is hellbent on meeting its targets – and while I understand this to an extent – we must also appreciate the economic viability of the situation. If you ask any landlord to spend up to £ 10,000 to make their property more energy efficient, or risk a £30,000 fine, they have two options:

Do the work and pass the cost on to the tenant through higher rents (they will, after all, be the main beneficiaries of the cheaper energy bills).

Or sell. Looking at the housing market, and my own choices, I think a lot of landlords have already sold – and will continue to sell.

For now, I’ve decided to remain invested in some properties so I dug out each property’s EPC.

The results were alarming: there was no consistency at all.

Properties inexplicably moved up and down bands (between the hallowed C and demonised D) despite no works being done. Apparently, the EPC assessor uses some whizzy software, but I couldn’t fathom what the software was doing or the results it was spewing out.

I came to the same conclusion as I have previously when I’ve looked at these certificates: the EPC system is broken. Michael Gove, the Housing Secretary, agrees. That’s great, but what are landlords supposed to do in the meantime while he decides whether or not to overhaul the whole system.

Last week, I had an argument with an EPC assessor who quizzed me about the wall insulation I installed (50mm foil backed Kingspan with 12.5mm plasterboard). He said there was no proof the insulation had been installed – despite me providing receipts.

He then recommended I rip up the new wooden flooring and insulate the floor. I asked what they would do to my rating if I did this, he replied: “A high D”. To get a C I would need to fit a solar water heater, apparently. When I asked where such a heater would go in a one-bedroom flat, I never heard back.

The proposed EPC regulations and energy efficiency measures are an impractical mess. They are also forcing landlords to delay works for fear of any repercussions if they do what is later deemed “the wrong thing”.

Last month I was informed an old storage heater (Economy 7) was broken. Having learnt how Dimplex Quantum (a high heat retention heater) can improve your score, I relished the opportunity to move up a grade. But a nagging thought stopped me. Is this upgrade still going to be considered an upgrade five years from now?

I decided to fix the old heater instead. Why bother doing anything today that may not potentially improve an energy efficiency score by 2028?

And this dear reader, is the frankly ridiculous situation landlords find themselves in. Why should I spend my valuable time, energy and money and then not get any reward for it?

Speaking with fellow landlords, I know I’m not alone. Underlying our entire business is a desire to get on and get ready, but running counter to that is an economically astute procrastination to delay doing anything until what is expected of us is made clear.

The Government has made a farce of the private rental market and created proposals that will hurt more people than they will ever help. We urgently need a framework and timeline that is realistic, without further destroying the housing market.