Exploring Positive Developments for Landlords in the Rental Landscape

Recent announcements have left landlords and letting agents with a sense of optimism for the future? Over the years, the rental sector has witnessed a continuous influx of new legislation and regulations (Goodlord, 2023), while the persistent issue of inflation (Smith, 2022) has driven up operational costs, exposing vulnerabilities in the rental ecosystem.

Many stakeholders have voiced concerns about the mounting pressures on landlords, which have contributed to a strained housing supply (Goodlord, 2023). However, it appears that the government is gradually acknowledging the challenges faced by this vital sector.

No More EPC Uncertainty

A significant turning point involves the government's decision to reverse its long-standing commitment to requiring landlords to reach an EPC C rating (Goodlord, 2023) in the private rented sector. Initially, when the proposal was introduced, it left landlords in a state of uncertainty due to a lack of concrete information, including no legally-required deadline and no announced financial support.

However, in a shift of perspective, Housing Secretary Michael Gove expressed that landlords were being asked to bear too heavy a burden and promised a more lenient approach (Malnick, 2023). Prime Minister Rishi Sunak recently confirmed that plans to enforce mandatory upgrades would be abandoned (GOV.UK, 2023).

This decision brings relief to landlords who were potentially facing costs of up to £10,000 to meet the required rating, with limited financial assistance. Properties with higher EPC ratings are already gaining popularity among buy-to-let investors (Silva, 2023). This suggests that landlords can continue to benefit from energy-efficient properties while having the flexibility to plan and implement upgrades on their terms.

Stabilising Mortgage Interest Rates

Another significant concern for landlords has been the burden of high mortgage rates, identified by 44.2% of respondents in the State of the Lettings Industry Report 2023 (State of the Lettings Industry Report, 2023) as a primary reason for landlords leaving the sector. While the recent decision to freeze the interest base rate (Silva, 2023) was not directly aimed at landlords, it provides a glimmer of hope for property owners who have been grappling with rising costs.

Although this freeze does not guarantee that rates will remain low indefinitely, the unexpected dip in inflation offers some encouragement, hinting at a potential stabilization of rates in the near future.

Progress Delays in Rental Reform

Lastly, the eagerly anticipated Renters (Reform) Bill (Goodlord, 2023) is still awaiting its second reading and progression through legislative channels. Delays in the bill's advancement have been attributed, in part, to the involvement of Conservative party whips who are also landlords, creating concerns among Tory MPs (Silva, 2023).

While landlords await further developments related to impending changes (Burnett, 2023), there is anticipation regarding whether these landlord representatives within the government will influence the final version of the bill as it moves towards becoming law.

In conclusion, recent shifts in government policies and economic conditions suggest a more favorable environment for landlords. Reversals on energy efficiency standards, mortgage rate stability, and delays in rental reform are providing landlords with some much-needed respite in an otherwise challenging landscape.

Reference list:

• Burnett, L. (2023) 5 ways to reassure your landlords about legislation changes (+ free talk track), Goodlord. Available at: https://blog.goodlord.co/how-to-reassure-your-landlords-about-legislation-changes (Accessed: 26 September 2023).
• Goodlord (2023a) Your complete guide to lettings legislation in the private rented sector, Goodlord. Available at: https://www.goodlord.co/newsagent/lettings-legislation-and-compliance (Accessed: 26 September 2023). 
• Goodlord (2023b) Renting done right, Renting Done Right. Available at: https://info.goodlord.co/en/open-letter-private-rented-sector-pressure (Accessed: 26 September 2023). 
• Goodlord (2023c) Home, Goodlord. Available at: https://www.goodlord.co/ (Accessed: 26 September 2023). 
• Goodlord (2023c) Proposals to increase minimum energy efficiency standards, Goodlord. Available at: https://blog.goodlord.co/your-guide-to-the-proposals-to-increase-the-minimum-energy-efficiency-standards (Accessed: 26 September 2023). 
• Goodlord (2023d) Renters (reform) bill: Your complete guide, Goodlord. Available at: https://blog.goodlord.co/your-guide-to-the-renters-reform-bill (Accessed: 26 September 2023). 
• GOV.UK (2023) PM speech on net zero: 20 September 2023, GOV.UK. Available at: https://www.gov.uk/government/speeches/pm-speech-on-net-zero-20-september-2023 (Accessed: 26 September 2023). 
• Malnick, E. (2023) Michael Gove warns against net zero ‘religious crusade’, The Telegraph. Available at: https://www.telegraph.co.uk/politics/2023/07/22/michael-gove-warns-against-net-zero-religious-crusade/ (Accessed: 26 September 2023). 
• Silva, | Marc da (2023) BTL landlords target properties with high EPC rating, Property Industry Eye. Available at: https://propertyindustryeye.com/btl-landlords-target-properties-with-high-epc-rating/ (Accessed: 26 September 2023). 
• Silva, | Marc da (2023b) Property industry reacts to Bank of England’s decision to freeze interest rates, Property Industry Eye. Available at: https://propertyindustryeye.com/property-industry-reacts-to-bank-of-englands-decision-to-freeze-interest-rates/ (Accessed: 26 September 2023). 
• Silva, | Marc da (2023c) Senior Tory MPs accused of ‘blocking’ renters (reform) bill, Property Industry Eye. Available at: https://propertyindustryeye.com/senior-tory-mps-accused-of-blocking-renters-reform-bill/#:~:text=A%20Whitehall%20source%20told%20the,MP%20and%20holding%20things%20up.%E2%80%9D (Accessed: 26 September 2023). 
• Smith, R. (2022) Do you know what rampant inflation means for your landlords and tenants? [+podcast], Goodlord. Available at: https://blog.goodlord.co/what-rampant-inflation-means-for-landlords-and-tenants (Accessed: 26 September 2023). 
• State of the Lettings Industry Report, 2023 (2023) State of the Lettings Industry Report 2023: Goodlord and vouch, Report 2023 | Goodlord and Vouch. Available at: https://www.goodlord.co/state-of-the-lettings-industry-report-2023 (Accessed: 26 September 2023).