The Bath Landlord Forum hosted a successful event at The Francis Hotel, Bath on 15 March 2023, which focused on energy efficiency considerations in rental properties. The event was hosted by Reside’s Toby Martin and featured guest speakers who provided valuable insights on this important topic.
The event was attended by a large number of local landlords, property managers, and industry experts, who were keen to learn more about the latest developments in energy efficiency and how they could apply them in their own rental properties.
Toby Martin started off the event by giving a lettings legislation update. He summarised a range of recent and upcoming regulations, including the importance of complying with regulations related to energy efficiency.
Olly Meyer, a domestic energy assessor from Meyer Energy, was the next speaker. He spoke about how Energy Performance Certificates (EPCs) are recorded and what constitutes a good or bad EPC. Olly explained that EPCs are a legal requirement for landlords and that they need to be renewed every ten years. He also highlighted some of the factors that can impact the rating of an EPC, such as the age of the property, the type of insulation, and the heating system.
Sonia Pruzinsky from the Centre for Sustainable Energy was the final speaker. She explained the funding options that are available for landlords looking to improve the energy efficiency of their properties. Sonia discussed the different schemes that landlords can take advantage of, such as the Energy Company Obligation (ECO) and Home Upgrade Scheme. She also highlighted the importance of taking a holistic approach to energy efficiency and encouraged landlords to think about ways to reduce energy usage beyond just making physical upgrades to their properties.
The event was highly informative and provided valuable insights into the latest developments in energy efficiency for rental properties. Attendees also had the opportunity to network with other landlords and share best practices.
“We were delighted with the turnout for this event and the engagement of our speakers and attendees,” commented Toby Martin. “Energy efficiency is an important issue for landlords, and we hope that this event has helped landlords to better understand how to deal with the government’s proposed regulations.”
The Bath Landlord Forum plans to host more events on important topics related to the rental property industry in the future. For more information about the Bath Landlord Forum and future events, please visit their website at www.bathlandlordforum.co.uk.
Reside is an award-winning independent letting agent in Bath. Please get in touch if you would like to discuss any aspect of letting or managing your property; we would love to hear from you.
The energy bills of every Bath resident will rise in April as the price cap increases to account for the global increase in the cost of gas. Those not on the gas mains will still be hit as the UK uses gas to make 45% of its electricity.
So, what can Bath residents do to reduce their energy consumption and ultimately save money?
First, let’s look at the scale of the costs.
Considering the increase in energy prices from April, the combined energy bills for the whole of Bath come to…
£63,677,830 for central heating
£12,767,780 for hot water
£6,938,619 for lighting
There are extra energy costs for washing, fridges, etc., yet I wanted to focus just on the home as this is a property blog.
Everyone’s bills will be around 50% more expensive in 2022 than in 2021, but it’s not too late for Bathonians to take some quick steps to cut their energy bills and, at the same time, cut our carbon footprint.
Just over a quarter of the UK’s carbon comes from heating and lighting our 27.6 million homes, and each UK home produces4.39 tonnes of carbon dioxide a year.
Upgrading the energy efficiency of UK homes is seen as a vital step to attempting to mitigate the issues of climate change, fuel poverty and our nation’s energy security.
So, what are some quick wins for Bath residents to reduce the energy bills on their homes, and how will energy efficiency play a more significant part in the value of Bath homes in the future?
By turning down the thermostat by 1 degree, the average annual saving would be £105.91 per home and each homes carbon dioxide would be reduced by an eighth of a tonne (it all adds up!).
Replacing your bulbs when you can with energy-efficient bulbs will, on average, reduce your lighting costs from £172 per year to £103 per year.
What time does your heating come on and off? Could it come on later and go off earlier?
Smart meters (which are installed for free) are estimated to help lower UK homes electricity use by nearly 3% and gas use by 2% … again it’s all margin gains.
These are just a handful of ideas. Check out the internet for others as it’s fascinating how much energy we use for overfull kettles, chargers left on and tech on standby etc.
Yet, these things will only scratch the surface… many of us will need to go further, especially Bath landlords, to retrofit our properties to make them more energy-efficient.
This is particularly important as in June the Government announced they would make the country carbon neutral by 2050, meaning Britain’s homes need some enormous retro-fitting to meet these ambitious climate targets.
In 2018, the Government required private landlords to improve the energy rating of their rental properties by prohibiting the rental of any property with an Energy Performance Certificate (EPC) rating of F and G (the lowest ratings). Yet from 2025, it is proposed that will be increased to C for all new tenancies and 2028 for all existing tenancies (more on these EPCs below).
I don’t believe there is an appetite to mandate private homeowners to do this work, though you never know in the future.
So, how do you find out about yourBath home’s eco-credentials?
Since 2007, every new home that has been built, rented out or put on to the market in Bath has had to have an EPC, giving it a rating between A and G (rather like those stickers you see on fridges and washing machines).
A is the highest rating (i.e., best energy efficient and greener), and G is the worst efficiency rating.
38% of Bath homes are in that eco-friendly A to C energy performance band rating, compared to the national average of 40.1%
So, what next? Well, the Government will attempt to make the green revolution as painless as possible with technology.
In the future, we might have hydrogen central heating instead of mains gas; or have solar panels for electricity, all triple glazed windows and even ground source heating – sounds fanciful? Well, who would have thought some of the most wanted cars would be electric 20 years ago?
There is no doubt that the energy efficiency of our homes will rise in the coming years as the cost of fuel increases and people’s opinion on going green changes.
You don’t need to spend thousands of pounds to find out what you can do to make your property greener and cost less. Look at your EPC and it will tell you what small changes you can make to improve your Bath home’s energy efficiency rating and ultimately save yourself money. If you want to find the EPC rating of your Bath home, go to epcregister.com. If you need an EPC, drop me a line as I know some great local energy assessors that can easily do an EPC on your property at a price that won’t cost the earth!
Reside is an award-winning independent letting agent in Bath. Please get in touch if you would like to discuss any aspect of letting or managing your property; we would love to hear from you.
Bath landlords helped by ultra-low mortgage rates and a stamp duty holiday
Yet, some landlords anxious about a possible end to no fault evictions
New EPC rules could cost landlords £10,000+ per property
In this article, I will look at what happened in 2021 in the Bath buy-to-let property market and give you my opinion as to what lies ahead for Bath landlords in 2022 and beyond.
On a positive note, Bath house prices have rocketed, rents have risen faster than inflation, at the start of the year we had the benefit of a stamp duty holiday and finally, ultra-low mortgage rates, meaning Bath landlords had lots to be happy about in 2021.
On a more cautious note, the laws regarding renting are currently being debated in Parliament which will see the end of no-fault tenant evictions, and changes in regulations will require landlords to make their buy-to-let rental properties more eco-friendly at a cost of up to £10,000+ each.
So, let’s have a look at these points …
Bath Rents will Continue to Rise in 2022
Bath buy-to-let landlords have seen the average rent of a Bath rental property rise by 6.5% in the last 12 months.
The number of Bath properties available to rent on the property portals (e.g. Rightmove, etc.) at any one time is roughly 35% to 40% below the last decade’s average, meaning there is greater competition for each rental property.
Demand has increased for several reasons.
Firstly, some homeowners cashed in on the high prices, sold up and moved into rented property.
Secondly, some Bath buy-to-let landlords have also cashed in on the buoyant property market and sold their rental property when their existing tenant handed in their notice.
Finally, the rental sector has an inverse relationship to the state of the general British economy, meaning with the uncertainty in the British economy in the early part of 2021, this meant more people decided to rent rather than tie themselves into a mortgage.
Looking at the supply side of the Bath rental market, in the short term, rents will continue to grow as some Bath landlords are abandoning the rental market – some because of the impending regulation changes which I will talk about later, and others with the natural flow of people cashing in their investments on retirement.
With increased demand and restricted supply, this will only lead to competition becoming more severe between renters, thus making Bath rents continue to rise.
Bath House Price Growth Will Slow
Bath house prices grew by 15.3% in 2021, but slower growth is anticipated during 2022
For those that own property, the way house prices grew in 2021 surprised most people.
Bath house prices, according to the Land Registry, grew by 15.3% in 2021, with the typical Bath home reaching £425,500.
Many local landlords have been helped by this increase in Bath house prices and will be in a place to cash in on those capital gains by either selling their buy-to-let property (as mentioned in the previous section) or releasing some equity by re-mortgaging.
Whether Bath house price rises carry on at such a rate in 2022 will mainly depend on whether the imbalance between the number of properties that come on to the market (supply) is by the number of buyers (demand).
Most commentators believe that nationally house prices will be between 3% and 5% higher by the end of 2022 and I can see no reason why Bath house prices won’t be in that range by the end of the year either.
Mortgage Rates Will Rise
The reduction in tax relief for Bath buy-to-let landlords with mortgages in the last five years hit some landlords hard, yet this has been tempered by the inexpensive ultra-low mortgages available to buy-to-let landlords.
Yet even with the Bank of England increase in base rates, landlords with big deposits of 40% or more can benefit from low rates. For example, at the time of writing, you can get a BTL mortgage at 1.49% fixed for 5 years with a 40% deposit (meaning borrowing £180,000 on a £300,000 purchase would only cost you £719 per month on a 25-year mortgage – or £224 per month on interest only).
However, those with only a 25% deposit must pay slightly more, but only at a mortgage rate of 1.64%… Who can remember mortgage rates of 14% to 15% in 1992?
With inflation rising, the Bank of England has already indicated further interest rate rises are on the cards. I suspect they will be around the 1% mark by Christmas 2022. Therefore, if you are one of the one in five landlords on a variable rate mortgage, your margins will be squeezed as your variable rate mortgage will rise in line with the Bank of England interest rate rise.
Maybe it’s time to consider fixing your mortgage?
The End of No-fault Evictions?
The Renters’ Reform Bill in England and The Renting Homes Act in Wales are both set to abolish Section 21 (no fault eviction). Section 21 laws allow landlords to take back possession of their rental properties without having to prove fault by the tenant.
Yet in 2022, Westminster will issue plans for a change of this law which will probably incorporate the eradication of Section 21, which would signify a major change in the balance of power between the landlord and tenant.
Some doom mongers are worried that with the abolition of Section 21, landlords may be unenthusiastic about renting and therefore sell up and leave the rental sector altogether. Yet these people said the same when tax relief for landlords was changed five years ago.
The Scottish equivalent of Section 21 was abolished at the end of 2017.
At the time, there was some anxiety about how this would affect the Scottish rental market, as anxious landlords and letting agents felt that they could lose control of their rental properties under this new law. Nonetheless, just over four years later, the rental sector has not collapsed in Scotland. The buy-to-let market remains upbeat, and there are signs that a Scottish landlord’s right to evict their tenant has been reinforced by these changes in the law.
The reason the Scottish changes worked was because the new grounds for repossessing rental properties was clear and wide-ranging. The Scots sped up the slow and unwieldy eviction process where the landlord had a legal and genuine reason to re-claim their property.
All I hope is the same changes to court procedures are made south of the border.
New EPC Rules Could Cost Bath Landlords £10,000+ per Property
The law currently stands that landlords need an Energy Performance Certificate (EPC) with at least a rating of E.
Westminster is anticipated to increase the EPC requirement for private rental properties in England and Wales to an EPC rating of C for all new rental tenancies by 2025/6, and for all existing tenancies by 2028, whilst Scottish landlords are also expected to see energy efficiency measures in their new proposed Housing Bill.
The problem is 1,959,045 of the 2,965,455 registered rental properties on the EPC database have an energy rating of D or below.
To take a property from an EPC D rating to a C rating might only cost a few hundred pounds, yet the average for all rental D and E rated properties has been calculated at just over £10,000 per property.
My advice to every Bath landlord is to look at the full EPC report of their rental property (and if you haven’t got it, contact me and I will send it to you – whether you are a client or not) as that will tell you whether this will be a big or small job.
Renovating the UK’s rental stock to meet the Government’s carbon neutral targets will be a big trial for landlords. There is talk of exemptions, which may apply to a great many Listed buildings, as there currently is for the existing minimum EPC E rating – yet only time will tell on that front.
Maybe those landlords currently buying properties to add to their rental portfolio should reconsider their buying strategy? In the past, it has been normal for Bath buy-to-let investors to be attracted to the inexpensive older properties that need an overhaul. However, with the potential energy efficiency laws coming into the game, it’s rational to suggest that buy-to-let landlords will be more predisposed to buying slightly newer properties rather than have the cost for the upgrades to meet the potential energy targets.
Conclusion
Roll the clock back 20 years and making money from buy-to-let in Bath was as easy as falling off a log. Yet with increased legislation and regulation, together with the changing dynamics of the British economy and the requirements tenants want in a rental property, making money won’t be as easy over the next 20 years.
It amazes me that 11 out of 20 landlords do not use a letting agent to help them with their rental portfolio, considering the cost can be offset against your tax.
Moving forward, savvy landlords will increasingly utilise their letting agent not only to collect the rent and manage the property, but also build up their portfolio to withstand the regulatory and demographic changes on the horizon, and to ensure that their investment is fit for purpose in the medium to long-term.
If your existing letting agent does not offer such advice, or you are a self-managing landlord, let’s have a chat about the future of the Bath rental market.
Whether you are a Reside client or not, if you would like me to look at your rental portfolio and see where you stand, then drop me a line and maybe we can meet for a coffee (or we can meet virtually over Zoom) to discuss the matter – all at no charge.
Reside is an award-winning independent letting agent in Bath. Please get in touch if you would like to discuss any aspect of letting or managing your property; we would love to hear from you.
Reside’s Toby Martin dives into the puzzling world of minimum energy standards in the private rental sector, and how they apply to Listed properties.
By law, any rental property must have an energy efficiency inspection carried out in order to place the property on the rental market. The energy efficiency of the property is graded between A and G, with A being the best rating. The property’s energy efficiency is summarised in a report called an Energy Performance Certificate (EPC), which must be included in the marketing particulars and provided to any prospective tenant.
A recent law, the Minimum Energy Efficiency Standards Regulations, was introduced to prevent landlords from renting out properties with an F or G energy rating without first carrying out the improvements suggested in the EPC to increase the overall rating. The intention is for the landlord to carry out any works necessary to raise the overall score to an E rating.
The government wants to raise the minimum energy efficiency standards to EPC Band C by 2025 for new tenancies in private rented homes, and by 2028 for all tenancies. However, this legislation is yet to be finalised.
Initially, it was thought that Listed properties were exempt from the requirement of even having an EPC due to the difficulty landlords would encounter when trying to improve the property. Listed buildings regulations restrict many of the improvements that are often suggested in EPCs, such as fitting double glazing windows.
However, recent clarification made it crystal clear that all properties, including those in Listed buildings, must obtain an EPC when going on the rental market. Listed properties, mainly due to their age and limitations on energy improvements, are more likely to receive low scores, but landlords of these properties should know that it is still possible to go to the rental market, even if it is impossible to increase the energy rating to the required E rating.
Landlords of low-scoring properties must carry out the recommended improvements to increase the energy efficiency of their property, but there are certain situations in which properties can be registered as exempt from these requirements. The most relevant of these exemptions are:
‘High cost’exemption: The prohibition on letting property below an EPC rating of E does not apply if the cost of making even the cheapest recommended improvement would exceed £3,500.
‘All improvements made’ exemption: Where all of the suggested energy efficiency improvements for the property have been made, or there are none that can be made, and the property remains sub-standard, an exemption from further improvements can be obtained and the property can be placed on the market.
‘Consent’ exemption: If third party consent is required to carry out a suggested improvement, for example from a freeholder or local authority, and that consent cannot be obtained, an exemption can be registered.
Despite the minimum energy standards regulations, any property can be brought to the rental market – you just need to know how to navigate the EPC maze.
Reside is an award-winning independent letting agent in Bath. Please get in touch if you would like to discuss any aspect of letting or managing your property; we would love to hear from you.
Don’t be fooled by 1st April changes to energy rules.
We are proud of being experts on the property in Bath. We are equally proud of keeping a focused eye on any changes to laws and legislation which may affect our clients.
One such change is the upcoming changes to energy regulations, which will come into effect on 1st April 2020, requiring private rental properties to meet a minimum level of energy efficiency.
The move relates to Energy Performance Certificates (EPC). In layperson’s terms, EPCs rate the energy efficiency of a property from A to G (A being the most energy efficient). They also contain recommendations on where you could make improvements.
The government plan is to ensure all EPC-rated properties on the rental market are a band E or higher. This means it will be unlawful to have tenanted properties with an F or G rating.
Since April 2018, it has been unlawful to grant a new tenancy on a property with an unacceptably low EPC rating; from April 2020, this law will be extended to cover all ongoing tenancies as well. Landlords therefore need to take steps to ensure their property is up to standard before the 1st April deadline.
I’ve already had several discussions with landlords about what this will mean for them. One thing is certain – people purchasing buy to let properties will need to factor in any extra costs this change could bring.
If you have a buy to let property or are thinking of investing in one please give us a call and we can explain more about the proposed changes.
Thanks for reading and if you have any other property related questions please don’t hesitate to get in touch with us – we’d love to help you.
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With landlords now needing to comply with nearly 150 pieces of law, it has never been more important for your tenancy to be managed by a knowledgeable, professional and regulated agency.
For guidance on all aspects of tenancy management, or if you are considering letting your property in Bath, contact us on 01225 445777 or info@localhost.
Back in January, we blogged about the ongoing saga concerning changes to EPC law in England. Letting and estate agents are required by law to commission an Energy Performance Certificate prior to marketing a property, but current legislation regarding how much of the report must then be shared with clients is very lax. The EPC gives an indication of how energy efficient a property is, and what can be done to improve its rating and decrease fuel costs.
Since early 2011 the government has been promising to tighten up EPC laws, but the proposed changes have been consistently delayed and pushed back. With the latest deadline of April 6th coming up shortly, it remains to be seen whether or not they will be postponed yet again.
The warning signs look ominous; last week, agents were due to be issued with guidance on the upcoming changes by the Communities and Local Government department. This did not happen. However, Estate Agent Today reports that a government insider has indicated that the changes will ‘definitely go ahead on April 6‘, despite the fact that the redesigned EPC has not yet been approved.
It is widely believed that, after April 6th, letting and estate agents will be required to attach the entire first page of the new-look EPC to all property particulars, although no guidance has yet been issued about online marketing.
While many believe that this marks an important step towards encouraging tenants and homeowners to increase the energy efficiency of their home, others see the EPC as something that is ignored by the vast majority of people moving into a new home. A recent report in The Guardian suggests that ‘nearly four-fifths of people (79%) who had received an EPC when buying or renting a new home had not acted on any of its recommendations to make it more energy-efficient and thereby save money’. The government will be hoping that the redesigned EPC, with a front page that clearly and simply details recommendations for improving the property’s energy efficiency, will have an impact on the amount of people who then act on the recommendations.
At Reside, we have always made the entire EPC available to landlords and tenants and we will continue to do so after April 6th. Examples of our EPCs can be found on the property pages of our website.
Since 1 October 2008, landlords and letting agents have been legally obligated to provide prospective tenants with a valid Energy Performance Certificate, should they request to see one. EPCs are carried out by accredited Domestic Energy Assessors and give landlords and tenants an indication of the energy usage and carbon dioxide emissions of a property, as well as guidelines for those wishing to improve the energy efficiency of their home. All letting and estate agents are required by law to commission a property’s EPC before they commence marketing it in any way; the agent must then be in ownership of the certificate within 28 days from when marketing began.
Currently, regulations governing how much of the EPC must be shared are very lax. Although the full report is usually several pages long, many letting agents only choose to share the EPC’s two summary graphs on their website, often omitting more detailed sections such as ‘Estimated energy useage and fuel costs of this home’.
In early 2011, the government announced that they would be introducing new legislation whereby agents would only have an initial seven days to procure an EPC from when marketing starts, as opposed to the current 28. Significantly, it was also announced that agents would have to attach the full EPC to property particulars, not just the graphs.
However, in early June 2011 the government admitted that they would miss their target of pushing the new legislation through by July 1st and declared that changes to EPC law would now be introduced on October 1st instead.
The government’s initial plans drew criticism from some quarters of the lettings and sales industry, who voiced concerns about the added paperwork that they would be required to produce. Under this criticism, the proposed changes were watered down so that agents and landlords will only be obliged to share the first page of the document. However, the first page of the EPC is due to be redesigned so that it also shows the key recommendations and their cost implications.
Towards the end of September 2011, the government announced that it was delaying its EPC changes yet again. At the time of writing, the commencement date for new EPC regulations has been pushed back to April 2012.
As it stands, many letting and estate agents still only choose to share the EPC graphs with their tenants. At Reside, we have always made full EPCs available on our website, and included the first page of the document on our property brochures. Click here to see an example of one of our EPCs.
Many thought that EPCs would be abolished when Home Information Packs were scrapped back in 2010. But, as EPCs are required by European law, it seems that they are here to stay – even if we do not know exactly what the government will do with them next.
The move relates to Energy Performance Certificates (EPC). In layperson’s terms, EPCs rate the energy efficiency of a property from A to G (A being the most energy efficient). They also contain recommendations on where you could make improvements.