What is the new
Landlord Legislation 2022?
By Chris Norris – Policy Director NRLA
There has been much talk about what is the new landlord legislation and what changes should landlords expect to see in 2022. With no set date for the release of the Renters’ Reform White Paper yet set, what do we know today and what is likely to happen? Here we shall dive into the hot topics of Energy Efficiency and changes to the Safety Regulations for landlords.
Energy Efficiency for rental properties
A large programme of reform is coming along for energy efficiency. This is the one that is going to have a greater impact on the way landlords run their businesses, and has become a hot topic within the private rented sector. So what is happening here?
Currently rental properties are required to meet an EPC D rating as a minimum or have a valid exemption. Back in 2020, the Government consulted on making a change that would bring the minimum EPC rating to C. This would apply to new tenancies from 2025 and to existing tenancies from 2028.
2025 is less than four years away, so there is little chance that the great swathes of the private rented sector who don’t yet meet the standard will be able to make the required upgrades in time. The subject has become a hot potato between the Department for Business, Energy and Industrial Strategy (BEIS) and the Department for Levelling Up, Housing and Communities, and as such we are still awaiting a response to the earlier consultation. However, it appears that this has become a really key point for the Government.
What Energy Efficiency changes can we expect?
The government would love to switch to a target that actually addresses carbon usage rather than just the cost of energy. The problem arises from the impact in may have if it incentivises landlords to replace very efficient gas boilers with electric alternatives. They do not want to drive landlords away from gas right now because although it is not the most environmentally sensitive option, replacing it with something like electric could further increase the cost of living for tenants.
I expect to see a slightly more nuanced response from the Government, one in which they talk about hitting a certain standard for the fabric of the building. So different metrics for insulation and for heating would allow landlords and households to continue to use gas for a period of time until we are ready with newer, more efficient, low carbon alternatives.
The decisions about what landlords will need to do in terms of water and space heating will depend on if the Government is trying to hit a cost of living target or trying to hit a low carbon target. This will be the difference between keeping gas and replacing it with hydrogen or taking out gas and potentially putting in electric storage heaters.
Does the EPC rating system need to change?
The EPC rating itself is dependent on too many assumptions. They were designed for Home Information Packs, which did not survive the test of time, but were introduced because of European legislation that we no longer have to implement. We have an opportunity here to design something that is fit for purpose and to design something that helps prospective tenants to understand the efficiency of a property.
It may be beneficial in the future to move towards something more like a Renovation Passport, for instance, that would be a type of logbook. This could be something that enables landlords to demonstrate the work they have done without necessarily having to repeatedly pay for EPC reports every time they make a change.
The irony at the moment is that the headlines are about the evils of gas heating. However, in Government circles gas still plays a huge role in their future. In terms of energy efficiency and the cost of living, the Government wants to see gas in homes for a period of time. We need to know what the preferred technologies will be in the future, because in a perfect world, we could arrive at a point around 2030 where we could easily switch new generation combination boilers from natural gas to hydrogen.
The Government is being incredibly naive if they think that the money generated from landlords paying for such types of work will be enough to spearhead the energy industry, to finance the training and the capacity that is needed for this to be rolled out nationally. They will need to introduce some kind of funding to help people over the line.
Safety Regulations for rental properties
An issue that will only affect landlords who have a property in a mid or high rise building is recent legislation around unsafe cladding or other fire safety issues that need to be remediated. This is something that is rising up the priority list at the moment. You may be familiar with the Building Safety Bill, which has been around for some time. It was something that did not really impact landlords differently to other householders until a month or two ago when the Government decided to pretty much remove landlords’ protection from remediation costs. However, there has been a bit of change in that there have been some concessions for the very smallest landlords.
We have changes to smoke and carbon monoxide alarm regulations. This is a relatively minor change in so far as when the regulations were introduced back in 2015, they were a bit of a mess. They were not very well drafted and they only required carbon monoxide detectors in rooms with solid fuel appliances. The change that is now going to be introduced is to require these alarms to be installed anywhere where there is a combustible fuel appliance.
We do not yet have a date when this will be introduced, but I would recommend looking at your portfolio to see if you have gas boilers and if you have a carbon monoxide detector. Whether these regulations arrive sooner or later, I would recommend fitting one simply because it is good practice and they are not expensive, plus it will be a requirement sometime in the future. For Scotland, the implementation of new regulations this year require connected alarms in all rental properties.
Stay up to date
As landlords it will be important to keep a keen eye on forthcoming changes to keep your rental properties compliant, profitable and great homes for your tenants. The NRLA is committed to helping landlords maintain the high standards that will move the industry in the direction in which it needs to go. As a promoter of the same standards, Asset Academy is partnering with the NRLA and offers its students a discounted membership to the NRLA.