The UK government’s plan to mandate an EPC rating of ‘C’ or above for all private rental properties by 2030 is sparking a heated debate. While the policy aims to create warmer, more energy-efficient homes, a new Early Day Motion (EDM) from Labour and Green MPs claims that the Renters’ Rights Bill doesn’t do enough to protect tenants from rent increases following these improvements.

The Political Stance

Labour MP Bell Ribeiro-Addy, who tabled the motion, argues that if landlords receive government grants for energy-efficiency upgrades, these should be considered contributions by the tenant. This would prevent landlords from using the improvements as a justification for hiking rents at a First-tier Tribunal rent assessment. The motion, which is largely symbolic, has been signed by several MPs, including Green Party co-leader Carla Denyer.

The Landlord’s Perspective

Despite the claims that grants can easily cover the costs, research by estate agents Benham and Reeves highlights the financial burden on landlords. Their data suggests:

• High Costs: The average cost of upgrading a sub-C rated property to a ‘C’ or above in England is more than £7,000.
• Long Payback Period: While these upgrades lead to an average annual energy bill saving of £280 for tenants, it would take the average landlord an astonishing 26.4 years to recoup their investment from these savings. In London, this timeframe stretches to over 31 years.

The Government’s Position

The government has so far rejected an amendment to the Renters’ Rights Bill that would have provided stronger protections for tenants against rent increases linked to grants. Justice Minister Sarah Sackman has also stated in Parliament that landlords are legally able to factor in the cost of improving a property’s EPC rating when setting “higher market rents.”

This issue highlights the complex challenge of balancing the need for better housing standards with the financial realities for landlords and the affordability crisis for tenants. As the Renters’ Rights Bill progresses, this debate will likely continue to evolve.