As I’m sure you are most likely aware, there was a dramatic increase of the energy price cap (54%) this month with households seeing their annual bills rise to between £1,500 to £2,000 for the year. After the financial strain of the pandemic, alongside Russia’s recent invasion of Ukraine, there has become a global pressure on fuel prices. It is known that there will be a further energy price cap review in October with predicted annual household bills being £3,000 by the end of 2022. Naturally, we wanted to explore how this would effect the rental market with Landlords and Tenants fighting to keep costs down.
New EPC Laws:
The government’s targets state that by the end of 2025, new Lets will require an Energy Performance Certificate (EPC) rating of band C or above. Currently, just over half (51%) of all rental properties let out over the last 12 months had an EPC of band C or above, virtually unchanged on the previous 12 months. This leaves 49% of properties with Landlords who are expected to shell out on energy efficiency improvements before the deadline, and existing tenancies until 2028. Mortgage lenders also have new requirements too ensuring that the average performance of their domestic portfolios is at least EPC band C by 31 December 2030.
For Landlords:
Rental units are believed to be less-efficient than owner occupied properties so technically speaking, will be more expensive to run. This will have Landlords who include their bills in the rental price, reviewing their investment to ensure it is still financial viable and maintains a profit. In Peterborough, almost half (46%) of tenants are aged between 18 and 29 which may mean that a large slice of rental demand could disappear if they decide to not move from their family home, potentially leaving Landlords with an empty property and paying more than usual to keep it running. If demand slows down too dramatically, similarly as during the pandemic, Landlords may want/need to sell off parts of their portfolio causing a stock shortage for potential renters and prices inflate if demand remains high.
Advice:
If you are a Landlord with properties in or around Peterborough, Cambridgeshire then we can offer you free and impartial advice regarding your investment. We have services that include legal compliance, wealth management and portfolio reviews.
