Another week with no shortage of housing news, lets see what’s hit the headlines this week, and no surprises EPC’s are strong headline news again. But first:
The Supreme Court decision in Rakusen v. Jepson
This is the case where tenants renting under a ‘rent to rent’ arrangement are claiming a rent repayment order from the superior landlord rather than their direct landlord.
The court has found for the landlord, partly on the basis that a ‘repayment’ order cannot be made against someone who has never received the money. Although Solicitor David Smith has suggested that if MPs are unhappy at the decision, they could amend the Renters Reform Bill to change the law.
If you want to learn more about this important case, barrister Robert Brown, who acted for the interveners NRLA will be discussing it with me in a free webinar next week which you can read about here.
EPC’s are grossly inacurrate
New research just released makes a staggering claim that EPC’s are inaccurate, can be easily rigged and are not worth the paper they are written on. A report in the Sunday Times carried out by a compnay called Carbonlaces makes the claim that EPC’s overestimate energy use by up to 344%.
Carbonlaces compared EPC’s on over 17,000 homes against their actual usage logged by their smart meters every half hour for 300 days, to work out their energy bills. They said
The average metered gas and electricity use for all the properties studied was 125kWh per square metre a year — 91 per cent lower than what their EPCs claim (239kWh/m2/yr). The lower the EPC rating, the bigger the overestimation. For properties with the worst rating of G, EPCs estimate they use 656kWh/m2/yr. Yet their smart meters show they use only 151kWh/m2/yr — a 344 per cent gap.
It was noted that carbon emissions were also grossly over estimated by 20% and 308%.
EPC’s for new homes were also noted to be widely open to abuse where an EPC can be issued at design stage where it is based on assumptions, not actual build. New builds have then had to be ‘adjusted’ by filling holes and gaps after build work if the rating comes out lower than originally declared.
This is of high importance to landlords who are under pressure to have all let properties at an EPC rating of C by 2025.
Watchdog launches report into PRS
A three month investigation by The Competition and Markets Authority will look into the ‘end to end’ experience of a tenant from finding a house, renting it and then moving in. It will look into the relationship between landlord and tenant along with any intermediaries such as letting agents.
Running along side of this it will also run a study on house building. It will see how builders are delivering the right sort of homes, land management, land banking and how councils see the delivery of affordable housing. It will also look into what might be holding up builders implementing newer building techniques and sustainable net zero homes.
It will be interesting to see what their reports identify.
Airbnb loophole on council tax
It appears that some second home owners are changing their lets to Airbnb which means that they become permanent short lets and thus only pay business rates rather than higher council tax.
This claim is made by Action on Empty Homes which claims that more than 250,000 properties have stood empty for more than six months, whilst some 207,000 are excluded from paying council tax due to exemptions. Couple this with the 257,000 second homes and 70,000 second homes that are now short lets means there are over 1m homes with no residents.
Action on Empty Homes wants the government to act more on Empty Dwelling Management Order powers and remove the need to prove vandalism, anti-social behaviour or dangerous dereliction with an empty home before action can be taken. It also wants to councils to be better able to deal with local empty homes.
The campaign says
One owner can own as many ‘second homes’ as they like and does not have to prove use of them as a ‘second home’, nor pay council tax penalties for leaving them empty and unused. So are these all 257,000 ‘second homes’ actually holiday homes?
Action on Empty Homes wants the UL government to apply harder rules like Scotland and Wales, where short lets have to be licensed and pay need planning consent.
HMO decline from constant legislation
The overall number of HMO’s has declined in the past year with East Midlands having the highest decline of 26.1% followed by the North East dropping by 15.8% and the South East being down by 6.7%. Some areas have bucked this trend and actually increased their stock such as West Midland that has 16.9% record growth over the past year.
HMO’s account for 2% of the entire nation’s dwellings, London being home to the largest stock of 145,378 and the East Midlands has the lowest of 21,752. These figures have been recorded following the government’s recent and ongoing changes to HMO regulation to improve safety and living standards. According to Sirius, new regulations along with higher costs and more complicated laws have driven some HMO landlords out of the market.
Kimberley Gates, head of corporate partnerships at Sirius Property Finance says
Any legislative change designed to improve tenant welfare is a positive one on the face of it, but much like the regular buy-to-let sector, a perhaps overly heavy-handed approach by the government has led to a decline in the number of HMOs available across the nation.
The implications of this decline to tenants are inevitably a higher cost when renting, due to the growing imbalance between HMO supply and demand.
However, as the HMO sector continues to find its feet in the wake of these legislative changes, it presents a great opportunity for investors entering the space who can hit the ground running and capitalise on high tenant demand levels. Providing they have their house in order in terms of licensing and living standards, of course.
You can read more here.
Snippets
Huge discounts for landlords making cash purchases
High number of BTL landlords still unaware of the upcoming changes to EPC regulations
Third of landlords could be forced to sell up after failing their lender’s affordability test to remortgage
Politicians want tax incentives for landlords to boost energy efficiency
Landlords urged to check grants for EV chargepoints
‘Link landlord EPC costs to rents instead of £10k cap’ politicians told
Bailiffs accused of confusing vulnerable tenants with ‘lookalike’ police outfits
1000s of ‘mortgage prisoner’ landlords still need help, says Martin Lewis
Newsround will be back next week