After recent announcements, is the future looking brighter for landlords and letting agents? Oli Sherlock, Goodlord's Director of Insurance, shares his thoughts.
Oli Sherlock
Sep 25, 2023
Landlords and their letting agents have faced a steady stream of new legislation and regulations in recent years, while inflation driving up costs has simply exposed the fragility of the rental ecosystem.
Many have pointed to mounting pressures on landlords leading to a housing supply that's stretched thin - including in a recent open letter, coordinated by Goodlord. It seems that the government is slowly starting to come around to this logic.
No more EPC uncertainty
The government has U-turned on its long-promised proposals to increase Minimum Energy Efficiency Standards to an EPC C in the private rented sector.
After the proposals landed, very little further information was released, making it difficult for landlords to plan with no legally-required deadline and no additional financial support announced either.
Then, back in July, the first murmurings that the government could be softening its approach. Housing Secretary Michael Gove declared: "I think we’re asking a little too much of [landlords] and therefore we will give a greater degree of breathing space."
And now, Prime Minister Rishi Sunak has confirmed that plans to force landlords to upgrade "will be scrapped".
This will be a relief to landlords that were faced with paying up to £10,000 to reach the required rating, with limited support, had the proposals gone ahead.
Properties with high EPC ratings are already proving popular for buy-to-let investors. Hopefully, this means that landlords will continue to see the long-term benefit of energy efficient properties - but with the flexibility to make any upgrades to their own timescales.
Mortgage interest rate freeze
Another big concern for landlords is high mortgage rates, which 44.2%% of those surveyed in our State of the Lettings Industry Report 2023 say is a big reason for landlords leaving the sector.
Although the recent interest base rate freeze was not a decision taken by the Bank of England with landlords in mind, it will nonetheless signal some light at the end of the tunnel for property owners that have seen their costs squeezed.
This freeze doesn't mean rates won't increase again in the future, but the surprising dip in inflation bodes well for forecasts that suggest we'll soon see those rates peak.
Delays to rental reform
Finally, the Renters (Reform) Bill. We still wait patiently for a second reading, to continue to push the bill through the houses towards Royal Assent.
But the delay appears to be due to Conservative party whips that are also landlords, who are "amplifying the level of concern among Tory MPs and holding things up", according to reports.
While there are plenty of ways to reassure landlords around the changes to come, we wait to see whether these landlord representatives in government will affect the final version of the bill at the point it becomes law.
