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Telegraph
11 hours ago
- Business
- Telegraph
Landlords could be forced to forgo rent for a year under Labour reforms
Landlords could be forced to forgo rent for up to a year under Labour's rental reforms, experts have warned. A provision in Angela Rayner's Renters' Rights Bill, which is just one parliamentary vote away from becoming law, will stop landlords who put their homes on the market from relisting properties as rentals for up to a year if they fail to sell. With as many as a third of house sales falling through, it could leave thousands of potential rental properties locked out of the market. So-called 'Section 21' notices – also known as no-fault evictions – will be banned, and all tenancies will be on a rolling basis with no fixed end date. The Bill will stipulate that landlords can only repossess properties in four circumstances: if they're looking to sell, if they're looking to move in, or if there is redevelopment or if the property is seized by a mortgage lender. Other grounds include if tenants fail to pay the rent on time, although landlords will have to wait longer to evict for this reason. Chris Norris, chief policy officer for the National Residential Landlords Association (NRLA), said: 'Whilst we understand the Government wants to prevent abuse of the new tenancy systems, the country cannot afford to have homes standing empty for months on end. 'Around a third of property sales fall through before completion, mostly as a result of problems faced by the buyer. 'Given the scale of the housing crisis, it cannot be right that homes will be left empty for many months even when landlords are not to blame when a house sale fails to progress.' Nathan Emerson, chief executive of Propertymark, said that the new rules will mean that 'landlords must provide at least four months' notice to a tenant should they need or wish to sell their property. In addition, there will also be an initial 12 months 'protected interval' at the start of any tenancy where a landlord is prevented from evicting a tenant for the purpose of selling. Further to this, should a landlord choose to sell the property in question, they will be restricted from re-letting that property for a period of 12 months after evicting the tenant, should the property not sell'. Mr Emerson added: 'This may in some circumstance cause a degree of property vacancy, in an already pressurised situation where supply is greatly required.' Many of the reforms included in the Bill were first mooted by Michael Gove, the former Conservative housing secretary. But the original legislation said landlords would have to wait three months to relist a property that had been put on the market, rather than a year. Landlords have repeatedly warned that the more stringent rules will push them out of the market, eat into margins and make letting out properties unprofitable. In March, the number of UK properties available for rent hit an all-time low of just 284,000 – 23pc lower than during the pandemic, when the market dried up. Tax credits on mortgage interest for landlords were gradually slashed between 2017 and 2020, down from 40pc for higher-rate taxpayers to a flat rate of 20pc. Interest rates leapt, with buy-to-let mortgages at the sharper end of the increases – squeezing landlord profits even as rents rose. In Rachel Reeves's maiden Budget, an extra 5pc stamp duty surcharge was introduced on additional property purchases. Housing charities said that the delay of a year was necessary in order to stop the backdoor return of 'no-fault' evictions. Ben Twomey, chief executive of Generation Rent, said: 'It's right the Government will outlaw arbitrary Section 21 evictions through the Renters' Rights Bill. This change can't come soon enough. 'If landlords are concerned about a property sitting vacant, they are free to sell with sitting tenants.' A Ministry of Housing, Communities and Local Government spokesman said: 'Our landmark Renters' Rights Bill will bring long overdue fairness to the market by making sure it is unprofitable for landlords to evict a tenant and deprive them of their home, just so they can rent to new tenants at a higher price.'
Telegraph
5 days ago
- Business
- Telegraph
Landlords face higher EPC bills as Labour's reforms kick in
Landlords could be forced to fork out hundreds more for energy performance certificates (EPCs) from Sunday as new rules come into force, experts have warned. Under reforms, energy assessors will be expected to use a new data collection system, raising the price of certificates to up to £250 each. The more stringent criteria could also mean that properties could drop an EPC band, experts said, making them impossible to let under rules set out by Ed Miliband, the Energy Secretary. Under the new methodology, assessors will be required to inspect the size, frame type and glazing of every window in the house more thoroughly, as well as recording any extractor fans and blocked chimneys. Chris Norris, of the National Residential Landlords Association (NRLA) property body, warned that the price of an EPC certificate, which typically costs between £50 and £120, could rise by £20 this summer as a result of the changes. He said: 'It's reasonable to assume that it will take assessors longer to take more precise measurements and input more specific data, so price rises are inevitable.' However, Sean Horton, of mortgage adviser Respect Mortgages, said the more intensive assessments could increase the price of certificates 'to £150-£250 easily'. He added: 'The window measurements alone are crackers. Instead of just noting 'typical double glazing,' assessors now need to measure each window individually, record orientations, frame types, glazing gaps, ages, draught proofing – the lot. 'That's going to make each assessment much longer, with the cost passed on to the landlord.' From 2030, all rental homes must have an EPC score of at least C, while landlords accepting new tenants will be expected to achieve the required standard by 2028. The plans are championed by Mr Miliband, who said it was a 'Tory scandal' that Britain's poorest households were living in 'cold, draughty homes', adding that 'many rent from private landlords, below decent standards'. But Anna Moore, of retrofit company, Domna, warned that the new system would likely result in many homes dropping an EPC band. She said: 'In particular, the model changes how electric heating systems are scored, intended to solve the problem of people installing heat pumps and then seeing their EPC go down. 'The new model also lowers the 'default assumptions' on carbon emissions in traditionally heated homes, so many properties will see their EPC drop. 'For example, a 1960s 90m² home, with empty cavity walls, might drop five points from EPC D to EPC E.' Labour is due to replace the beleaguered EPC system entirely with the much-anticipated Home Energy Model, following years of consultation. Among other changes, the reforms are expected to favour homes with the 'capacity to integrate with smart technology', which some fear will penalise homeowners who refuse a smart meter. Mr Norris, of the NRLA, said: 'When the Home Energy Model launches, the increases could be significantly more, depending on the outcome of the expected consultation into their methodology. 'While it is difficult to predict, it would not be unreasonable to expect that prices could double.' Kundan Bhaduri, of the Kushman Group real estate firm, said: 'For portfolio landlords, this is death by a thousand clipboard checks. 'Costs will rise sharply, and worse still, homes that previously scraped a C rating could now drop to a D, dragging us into yet another regulatory penalty zone. And this is just the warm-up act before the even more chaotic Home Energy Model arrives.' Many landlords are expected to sell up ahead of the changes, while others will be forced to spend thousands of pounds insulating properties or installing heat pumps to meet the required grade. Labour has floated a spending cap of £15,000 per property, and on Wednesday, Chancellor Rachel Reeves confirmed £13.2bn worth of funding for insulation upgrades. However, there are fears the cost of green improvements will ultimately be passed on to tenants in the form of higher rents. Research by Swedish bank, Handelsbanken, revealed 92pc of UK-based landlords believe tenants would pay more for greener homes. Tom Darling, of campaign group Generation Rent, urged the Government to impose rent caps on landlords who accept grants for eco upgrades. He said: 'With so many renters in fuel poverty, it's vital the Government is trying to make homes easier and cheaper to heat through higher energy efficiency standards. 'However, these plans must take place alongside amendments to the Renters' Rights Bill to protect renters from eviction and rent rises where public money has been used to improve a property. These grants aren't there for landlords to turn a dime off of.' A government spokesman said: 'Everyone deserves to live in a warm, comfortable home. We're investing £13.2bn in the Warm Homes Plan to upgrade five million homes over this Parliament, cutting energy bills for good through new insulation, solar panels and heat pumps. 'These long-planned changes make EPC assessments more thorough, giving people a clearer picture of how energy efficient their home is.'
The Independent
04-06-2025
- Business
- The Independent
Landlords say homes energy efficiency schedule is ‘detached from reality'
The Government's plan to improve the energy efficiency of all private rented homes is 'detached from reality', landlords have warned. The proposed timeframe for requiring all properties to meet a higher efficiency rating is 'simply unrealistic' largely due to a shortage of tradespeople to carry out the work, the National Residential Landlords Association (NRLA) said. The Government's consultation on the plan, which aims to cut bills and emissions to deliver a statutory fuel poverty target, closed last month. It proposes that all privately rented properties must meet a minimum efficiency standard C, rather than the current required rating of E, by 2030. The NRLA said that while landlords support the overall objective, the Government must rethink its implementation process. Under the Government's current timeline, the new minimum efficiency standard, which will be set against new metrics, will be confirmed in late 2026, with a view to it applying to all new tenancies by 2028 – and all tenancies by 2030. The NRLA said this could give landlords less than two years to upgrade more than 2.5 million rented homes that it estimates do not currently meet the new energy performance standard. It also said ministers have not explained how the 'extensive' works will be funded. In its response to the consultation, the NRLA cited research by the Kingfisher group, the owner of brands such as Screwfix, B&Q and Tradepoint, which estimated there will be a shortfall of 250,000 skilled tradespeople in the UK by 2030. The NRLA proposed an adjusted implementation plan which requires landlords to meet specified standards relating to the fabric of the building, such as improved insulation, by 2030. All landlords should then meet secondary standards relating to smart meters and efficient heating systems by 2036, it said. NRLA chief executive Ben Beadle said: 'We want all private rented properties to be as energy efficient as possible. However, tenants are being sold a pup with timelines that are hopelessly unrealistic. 'The idea that millions of homes can be retrofitted in less than two years is detached from all reality, not least given the chronic shortage of tradespeople the sector needs to get the work done. 'Noble ambitions mean little without practical and realistic policy to match.' In its annual report in 2024, the advisory Committee on Fuel Poverty said: ' Failure to make rapid progress in the private rented sector on energy efficiency will fundamentally undermine any Government strategy to end fuel poverty.' A spokesperson for the Department for Energy Security and Net Zero said: 'Everyone deserves to live in a warm home, which is why we have recently consulted on plans to require private landlords to meet higher energy performance standards. 'These plans could lift up to half a million households out of fuel poverty by 2030, while also making renters hundreds of pounds better off. 'We have also announced plans to train up to 18,000 skilled workers to install heat pumps, fit solar panels, install insulation and work on heat networks.'
Yahoo
04-06-2025
- Business
- Yahoo
Rents to surge £900 to pay for Labour reforms
Are you a landlord planning to raise rents because of the reforms? Get in touch money@ Labour's rent reforms will add almost £900 a year to the average tenancy, a report has warned. Nearly half of Britain's buy-to-let landlords (44pc) plan to increase rents in response to the controversial Renters' Rights Bill, according to research by housing lender Landbay. The landmark legislation, due to kick in this autumn, will limit landlords to just one rent increase per year capped at the 'market rate' – the price that would be achieved if the property was newly advertised to let. Landbay said property owners were planning to increase rent by an average of 6pc, which would add £74 to the average monthly rent, or £888 a year. The survey also found that the majority of landlords (89pc) intended to raise rents in the next 12 months. More than a third (40pc) planned to increase rents by 3pc or more over the next 12 months, while over one in 10 (11pc) said they did not intend to put up rents at all. The Renters' Rights Bill will introduce new protections and rights for the 11 million private tenants in England by reforming the current system of renting. An end to fixed-term tenancies, longer notice periods, and restrictions on rent increases will give tenants more rights and landlords less control over how they manage their property and buy-to-let business. The bill is currently being scrutinised in the House of Lords. The Government aims for the reforms to receive Royal Assent by summer 2025, with implementation expected between October and December this year. The National Residential Landlords Association (NRLA) argued that the bill could force landlords out of the sector and push up rents if it is passed in its current form. Chris Norris, of the NRLA, said the 6pc rent increase figure was consistent with the NRLA's estimates that the Renters' Rights Bill would trigger rent rises of 3pc to 4pc above inflation. He added: '[The bill] is likely to affect tenants directly in many more ways than landlords. 'You have the prospect of tenancies becoming more risky, harder to end – and you have to wait longer to claw back arrears. 'Landlords will be pricing in that risk when setting rents.' A recent survey by Pegasus Insight showed that 37pc of landlords planned to sell a property in the next 12 months while just 6pc said they intended to buy. Rents in England rose by 1pc in May to £1,226, the highest level since October 2024, according to letting agent software firm Goodlord's rental index. William Reeve, Goodlord's chief executive, said: 'Although the pace of year-on-year increases is starting to slow… ongoing supply issues coupled with landlord jitters ahead of the Renters' Rights Bill means that rents remain on track to rise for the foreseeable future.' The Government was approached for comment. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
26-05-2025
- Business
- Telegraph
Renters Rights Bill: When will it become law?
Tenants who rent in the private sector are on the cusp of receiving greater protections from eviction, unfair rent increases and greater stability of tenure as the Renters' Rights Bill makes its way through parliament. The controversial body of legislation is the biggest change to renting in over 30 years according to industry body The National Residential Landlords Association (NRLA) which is battling to get some of the proposals changed to soften the blow for the buy-to-let sector. Here Telegraph Money explains the measures laid out in the bill, what that means for landlords and when it is likely to become law. What is the Renters' Rights Bill? The Renters' Rights Bill, which builds on the Renters' Reform Bill introduced by the Conservatives, will introduce new protections and rights for the 11 million private tenants in England by reforming the current system of renting. An end to fixed-term tenancies, longer notice periods to give renters more time to find a new home and restrictions on rent increases will give tenants more rights and landlords less control over how they manage their property and buy-to-let business. Labour says it will 'transform the experience of private renting' which will largely be achieved by ending Section 21 evictions dubbed 'no-fault evictions'. If the bill is passed in its current form, the NRLA argues that it could force landlords out of the sector – reinforced by a survey last month by Pegasus Insight which revealed 37pc of landlords planned to sell a property in the next 12 months while just 6pc said they intended to buy. New rules in the Renters' Rights Bill Evictions and serving notice: Section 21 no-fault evictions will be abolished. Fixed-term tenancies will be replaced with periodic tenancies, also known as rolling contracts that don't have an end date. Tenants will have a 12-month protected period at the start of their tenancy preventing landlords from forcing evictions to move back in or sell. Tenants can serve two months' notice to quit the property at any time. Landlords must serve four months' notice when moving back in or selling to give tenants time to find a suitable home. Landlords will not be able to evict a tenant in arrears until three months' payment have been missed, up from two months while the notice period has been increased from two to four weeks. Prices and payment: Rent increases are limited to once a year and only to the market rate which can be challenged by tenants at the first-tier tribunal if they believe it is excessive. Increases cannot be backdated. Large amounts of rent cannot be demanded in advance of a tenancy starting. Landlords must register with a digital database, failing to do so means that they cannot use certain grounds of possession. Asking rents must be published to prevent bidding wars making it illegal for landlords to accept offers higher than the rent advertised. Standards and safety: The Decent Homes Standard and Awaab's Law, currently applicable to homes in the social housing sector, will be extended to private sector landlords to ensure homes are made safe, are of good value and good quality. A private rented sector landlord ombudsman will be set up to provide an impartial and binding resolution for tenant complaints against landlords. Discrimination: Strengthened rights for tenants to have pets, although landlords can insist on pet insurance to cover any damage to their property. End discrimination against tenants on benefits or with children. Compliance: Councils will have the power to issue civil penalties of up to £7,000 to landlords who don't comply with the reforms rising to £40,000 for a serious breach or repeat non-compliance with the law. More strength will be given to rent repayment orders that can be issued by councils when landlords breach the law. What does the new renters' bill mean for landlords? Sylvie Harris, of property consultancy INHOUS, said: 'Through the abolition of Section 21 no-fault evictions, landlords will only be able to end tenancies using specific grounds under Section 8, such as rent arrears or anti-social behaviour or if they intend to sell or move into the property.' For the latter, an extended four-month notice period must be served. But the pressure this will place on a court system, which Matthew Pennycook, the housing minister, acknowledged during a parliamentary debate was 'on its knees', is raising concerns and has led to an amendment being tabled to review the impact of this plan on the legal system. When the Conservative government brought forward its draft renters rights legislation, then-minister Michael Gove said that the right to make no-fault evictions would remain in place until a full review of the courts had been completed. Currently, the average time between a landlord submitting a claim for an eviction and regaining possession of their property is more than seven months. In response to the Government's claims that the courts will be ready for the impact of the bill, Ben Beadle, chief executive of the NRLA, said: 'Seven months is an eternity for responsible landlords who may be dealing with serious rent arrears and for neighbours having to endure anti-social behaviour.' Not only could it take longer to evict a tenant, landlords will have to endure greater levels of arrears before they apply for possession as the minimum level of arrears for eviction is bumped up from two to three months. Landlords operating in the student let sector could also face challenges in operating their businesses efficiently if the legislation is implemented in its current form. Ending fixed-term tenancies removes the certainty for these landlords that their property will be available to let to a new batch of students when the academic year begins. Although grounds for possession have been included which allows landlords of houses in multiple occupation (HMOs) to evict last year's students to make way for a new group, one and two-bedroom student flats were not mentioned. Banning the receipt of large sums of rent upfront, meanwhile, could put landlords off renting to international students or tenants who have had credit difficulties in the past or do not pass affordability assessments. Without the security of payment in advance, these groups may struggle to be accepted. As the bill continues to undergo scrutiny, amendments to some of the measures may still be made. 'Reforms are still being actively debated and could change,' said Adam Jennings, of Chestertons. 'For example, 12-month fixed tenancies are still under discussion, with some stakeholders advocating for flexibility in terms of tenancy lengths. 'Another potential area for change involves the student housing market. The current restrictions on upfront rent payments are problematic for international students, and there's a push to either exempt certain categories of tenants or find alternative solutions.' Other amendments from the House of Lords include clarifications on the new grounds for possession and adjustments to notice periods. When will the bill become law? The bill is currently undergoing scrutiny in the House of Lords with the committee stage having commenced on April 22 2025. Although there is no definite date yet, Ms Harris says the Government aims for the bill to receive Royal Assent by summer 2025, with implementation expected between October and December 2025. The plan is to implement the changes to tenancies in one go rather than create a two-tier system that applies the rules to new and existing tenancies at different times.
