In a surprising move, Chancellor Rishi Sunak announced the government’s decision to abandon plans that would have compelled landlords to upgrade the energy efficiency of their rental properties. The much-feared minimum Energy Performance Certificate (EPC) standards, which aimed to raise properties to a rating of C by 2028, have been officially scrapped, bringing relief to landlords across England and Wales.

This policy reversal, though not yet officially law, has been a long-awaited reprieve for landlords who have been apprehensive about the potential financial burden of retrofitting their properties. The EPC, a rating system ranging from A to G, had posed a looming challenge, causing some landlords to contemplate selling their properties and exiting the rental sector.

Chancellor Sunak justified this decision by acknowledging the substantial costs associated with upgrading homes, suggesting that these expenses would inevitably be passed on to tenants in the form of higher rents. While the government plans to offer some funding to support landlords in their property upgrades, the fear of fines for non-compliance has been alleviated.

Ben Beadle, chief executive of the National Residential Landlords Association, expressed his relief, emphasizing the much-needed clarity the decision provides. He highlighted the detrimental impact of uncertainty on the supply of rental properties and urged ministers to develop a comprehensive plan supporting the rental market’s energy efficiency improvements.

It’s important to note that not everyone is celebrating this shift in government policy. Dawid Baranowski of property technology firm IMMO believes that the abandonment of minimum energy standards is disheartening, particularly considering their role in achieving environmental goals and reducing cost burdens for consumers. Baranowski argues that renters, who often do not own the properties they occupy, will bear the burden of higher energy bills at a time when the cost of living crisis is already prevalent.

While the government’s decision has its critics, it marks a turning point for landlords who have faced the looming specter of EPC upgrades. The acknowledgment of the financial strain landlords are under during the current economic climate is a step towards fostering a more supportive environment for property owners.

Furthermore, it’s worth noting that the government is increasingly recognizing the importance of the private rental sector (PRS) in the overall housing landscape. As rents and property values continue to outpace the growth of household incomes, there is optimism that the tide may turn on what some perceive as “landlord bashing.” This change in direction aligns with the government’s understanding of the need for a balanced approach that considers both the interests of tenants and landlords in the evolving landscape of the UK housing market.