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Landlords renting out older homes could soon face another financial headache, as data by Quick Move Now reveals that by 2018, nearly one in 10 properties could be unrentable if the proposed 2015 Energy Efficiency Regulations gets the go-ahead. These regulations set minimum energy efficiency standards for homes in England and Wales, which will make it illegal for landlords to grant new leases for properties with an energy performance certificate below E from April 1, 2018. Some properties can be registered as exempt from this.

Research shows about 8% of rental homes are currently below the minimum rating, so improvements will need to be made if landlords want to continue renting out these properties after April 2018. The move comes at a time when landlords are already being squeezed financially through the ‘tenant tax’ and other means. Also, the Royal Institution of Chartered Surveyors has claimed that 5.4 million UK households were renting properties in 2014, a figure that is predicted to rise to 7.2 million within the next eight years, which is likely to create an acute shortage of available properties. Although it is important for houses to be energy efficient, so that they are warmer and cheaper to run for tenants, to lose about 8% of available stock would be devastating for the rental sector.

Quick Move Now managing director, Danny Luke, said it is laudable that the government seeks to improve rental property quality, but that it needs to think about what support can be offered to landlords to make the changes, if the new legislation is to be workable. He said landlords are already concerned about their businesses because of changes to lettings fees, tax relief and stamp duty, with about a quarter of all landlords thinking of selling up. Landlords will need advice and support in improving energy efficiency in their properties for the long-term good of the rental market.

Calls have been made in the past by the Residential Landlords’ Association for the move to be delayed. It warned that any costs incurred in upgrading properties to meet the minimum E rating would be passed on to tenants through rent increases. Although landlords would be meeting the expense initially, tenants will benefit through lower energy bills. The top ways to make a property more efficient are to increase loft insulation to 270mm, at a cost of between £100 – £350, to install cavity wall insulation, which costs from £500 to £1,500 and to improve draught proofing, at a cost of £80 to £120.