Two Tier Kier strikes again with Tenants

 Ed Miliband and Angela Raynors at this weeks Labour Conferences pledged to end scourge of cold and draughty rented homes.

This was clearly aimed at PRIVATE landlords and completely ignores SOCIAL and COUNCIL homes.

Today Private landlords have to have a property that meets energy efficiency level of E or better.  There is no such requirement in England, Wales and Northern Ireland for COUNCIL or SOCIAL housing. Scotland does require targets to be met.

There are 1.6 Million council homes in the UK

There are 4.5 Million social homes in the UK

 There are 4.6 Million private rented homes in the UK

So over 58% of Tenants are living in cold draughty rented homes owned by the COUNCIL and SOCIAL landlords yet Labour ignore this.  This is yet another example of Two Tier Kier policies.

Many councils have introduced Selective Licencing to ensure PRIVATE rental properties meet an acceptable standard.  There is no such requirement for SOCIAL or COUNCIL properties. I experienced this personally when the council attempted to fail one of  my property for something being "sub standard" for fire detection as it did not have a Lithium battery.  I was surprised at this as the installed fire detection system  was 2 years old, fully complied with relevant standards, was mains interlinked etc.   So I did a freedom of information request and NONE of the local council properties had fire detection systems with a Lithium battery....  

Local councils mark their own homework on their accomodation standards. There is no independent audit, inspector etc to ensure COUNCIL homes are fit to live in. In the period 2017-2021, about half of all councils in  England admitted to spending £45M in legal fees defending in court disrepair claims bought against them.  That's alot of legal effort and the real number is probably double that as half of councils did not disclose their expenditure.  Surely councils would be better off spending the £45M fixing the defects in their properties rather than defending their incompetence in court?

So back to the EPC saga.  Labour want this to be energy efficiency level C.  Conceptually I agree with this but there are a number of problems

1/  There is no tax relief for landlords on expenditure (circa £20k) to meet level C. [HMRC call improvements, betterment.  There are no capital investment allowances, trading allowances etc that you can claim - you pay the tax on the rental income and cant offset it to reduce your profit.  If you have to borrow money to fund the improvements you probably wont be allowed to claim that (financing costs are capped at what they were at first rental) and then Section 24 caps this anyway. When you come to sell the home, then the expenditure will finally be allowed  as part of Capital Gain (only if you have the receipts). However expect Capital Gains taxes to steeply rise in the Autumn budget and inflation adjustment was scrapped years ago so the value of your expenditure will be eroded by inflation anyway and you will be taxed at the punitive CGT rates on the delta created by government driven inflation]

2/  The Tenant benefits from lower bills not the landlord yet Labour want to introduce rent controls limiting rent increases so the Landlord cannot recover the expenditure through higher rents.

3/ If a Landlord does manage to get higher rental income for higher energy efficiency, the Landlord doesnt really see much of this extra income - Section 24 means the Government benefits on tax on the extra income - not the Landlord.

So let's do a deep dive.  Although I am exiting being a Landlord as successive governments hate Landlords, I still do have a few rental properties.  These are Victorian properties (in one case a listed building).  I've done all the obvious things like energy efficient boiler, LED lighting,  double glazing,  loft insulation, even removing letter boxes to stop heat loss,  yet generally the energy efficiency rating is D.  Raising the bar to C is a big jump.  The EPC documents make suggestions.

Here's some examples from my EPCs:

• Install external wall insulation.  Cost £14,000.  Energy saving/year £231   [60 year beak-even]
• Excavate floor and install insulation.  Cost £1,200.  Energy saving/year £56 (Actually it will cost about £6,000) [107 year break-even]
• Install PV Solar.  Cost £8,000.  Energy saving/year £332 [24 year break even]

These are all big ticket items.   I will be dead before these even break-even.

There's also something fundamentally wrong with the EPC scoring system.  Changing to triple glazing - no benefit.  Increasing loft insulation - no benefit. How come?

I wrote a blog post on it several years ago

 Literally all the easy things have been done. Getting to C will cost probably £20k+ per property. No tax relief on this.  I dont win from it - the Tenant does. Will it increase the resale value of the property? No it will not.  Wasted expenditure.  Back to COUNCILS.  They dont need to achieve C.  In fact they dont even need to achieve E.  The timeline for councils and social housing meeting any energy efficiency targets keeps getting pushed back as councils presumably also know there's nothing in it for them only the tenant. As councils are cash strapped (paying all their huge public sector pension liabilities), they dont have the money to fix these council properties - just like private landlords.  Surely Labour should be leading by example and improving the standard of all council houses.....One rule for us and another rule for Kier.

Not a level playing field with Two Tier Kier. 

So how much is this going to cost PRIVATE Landlords?

Looking at the ONS data, 43% of private rental properties are rated D and 18% are rated E so that's 2.8Million properties need improvement to meet C.

Let's assume Landlords have to spend £15,000 per property. So that's a total of £42 BILLION needs to be spent by Landlords.  Well according to  Rachel's definition that's TWO BLACKHOLES. It seems Pensioners have to suffer to finance Government Blackholes but who has to suffer to finance these Blackholes?

Of course Labour will force Landlords to spend these BLACKHOLE sized sums of money.  They can then pat themselves on their Greedy backs and say "We've made life better for tenants" and it hasn't cost them a penny.  In fact they will probably raise £8 BILLION in VAT  TAX alone.

Getting back to the headline "end scourge of cold and draughty rented homes".  The real reason elderly tenants homes will be cold is Labour removing the winter fuel allowance.  Also 6.1 million households (approx 14 million people) will be cold in their poorly insulated council and social housing.   Get real hypocrites.

Sign my petition to make councils and social landlords comply with the same rules as private landlords and stop council tenants living in cold damp homes.