Some news stories for you on a Friday.
Growing calls from landlords for tax benefits for improving EPC ratings
There is a growing call from landlords to incentivise improving EPC ratings by making energy efficiency upgrades tax-deductible.
Currently, landlords making improvements to their property to increase their EPC rating have to pay through their own pockets or through grant systems such as the Green Homes Grant.
With the Government wanting a minimum EPC rating from all private rented sector properties to be level ‘C’ by 2025 , a good way to encourage investments would be to use tax benefits or breaks.
In Newsround 205 we discussed the NRLA report on the governments’ failings regarding EPC support and financial assistant for landlords. The policy regarding energy efficiency seems muddled considering the glaring contradictions within it: infamously whilst replacing a broken boiler is tax-deductible, replacing one for a more energy-efficient system is not.
If government want landlords to pay for energy improvements, which could cost several thousand pounds, creating tax benefits and providing more government support such as grants and funding will be essential.
Eviction figures increasing but still substantially below pre covid levels
Data from the Ministry of Justice has been released in the past week revealing the increase in possession claims between April & June. The Ministry of Justice revealed that between April and June this year, possession claims increased from 3,023 to 7,000; orders from 656 to 5431; warrants from 274 to 3,709 and repossessions from zero to 1,516.
This could be the start of the ‘eviction wave’ that has been predicted at the end of the eviction ban and when notice periods were starting to be reduced. Many people, both landlords and tenants have suffered a significant reduction in income since the start of the pandemic.
While many landlords have helped and reduced their rental price to allow tenants to stay within a property, for serious cases, eviction is the only option. While it is still below pre-covid figures, the rate will likely keep increasing as a backlog from the past year will occur.
It is important to contextualise these statements with the relevant changes in notice periods. The Ban on evictions within England ended on 31 May 2021 which is why repossessions went from zero to 1,516. This end of the eviction ban may have also had an effect on possession proceedings as well landlords may have started the process of eviction then.
NRLA says demand for Rental Properties at five year high
Data revealed this week by the National Residential Landlords Association shows that demand for rental properties is at a five year high, an 8% increase from the first quarter of this year.
The NRLA believe this is largely caused by the relaxation of covid restrictions and a more buoyant economic outlook. With that being said, this rise is not homogenous throughout the country, with areas such as Yorkshire, Wales and the south west having the greatest growth with over 60% of landlords responding saying that demand has risen in the past quarter.
In central London however, 53% of landlords responded saying demand had fallen.
It is interesting to note that statistics from Newsround 203 where it was discussed how London was the only region within England that rent was dropping in real terms. It seems that with demand dropping in London, rent prices are also lowering.
A warning to Government over the impact of benefit cuts on renters
A statement by significant institutions within the PRS which include the NRLA, Shelter, PropertyMark & Crisis has asked the Government to complete an assessment on the impact on renters on their decision to freeze Local Housing Allowance and cut Universal Credit.
The joint group argues that this decision may have a significant effect in pushing many households into poverty, debt and homelessness.
At the start of the pandemic, the Local Housing Allowance was increased to the 30 percentile and Universal Credit was increased to help accommodate at risk families from becoming homeless and accumulating debt. However, since April, the Local Housing Allowance has been frozen in cash terms and the Government is planning on cutting universal credit by £20 per week.
The statement asks for a full report and an assessment to be made into the impact these two policies will have for renters. These organisations believe that the Government should reverse its decisions as they believe without an assessment of the impact of these policies; this may have a significant negative impact on vulnerable members of society.
Problems with curbs on Airbnb and short lets
There have been many criticisms of landlords using properties for short term lets instead of for homes for long term tenants and the problems that these have caused renters. This has resulted in calls for stricter controls – possibly making them conditional upon planning and licensing.
However, this could be devastating for the rural community. This is discussed here in the context of a Scottish government consultation but the same problems will apply in England.
For example, short term accommodation is required not just for holiday makers but also for accommodation for seasonal and short term workers. Government needs to keep this in mind if bringing in similar rules in England or Wales.
Lloyds Bank and the PRS
It looks as if they have set themselves the task of buying up 10,000 properties by the end of 2025 and then a total of 50,000 by 2030.
The properties will be managed by a subsidiary company called Citra Living.
Lloyds are anxious to get a new income stream with interest rates being so low, plus this new venture will give them an extra outlet for other products such as insurance and loans for deposits.
Newsround will be back next week.