Market report March 2024 – signs of life in housing sector
Key sales market indicators are looking more positive, while rents continue to rise.
According to their analysis, 21% of homes in the private rented sector fall below the line. Properties may fail of a number of reasons – either because they contain serious hazards, are not in a good state of repair, are missing modern facilities or services, or don’t provide reasonable thermal comfort.
At the moment, the Decent Homes Standard only applies to the social rented sector. However, the government is planning to extend it to the private sector as part of the Renters’ Rights Bill. Last month the government opened a consultation on how it should be implemented.
Even so, landlords of homes that don’t meet the standard will have time to make repairs and upgrades. The government plans to apply new standards to the PRS in either 2035 or 2037. This makes more space for the rollout of other reforms, including Awaab’s Law and raising the minimum Energy Performance Certificate rating to C.
Depending on how the consultation goes, fewer properties could be judged non-decent. Under the current standard, a home can fail if it has a kitchen more than 20 years old or a bathroom more than 30. One of the proposals put forward by the government is to remove the maximum age and only score facilities on their size, layout and state of repair.
But politicians are also looking at introducing new requirements, such as mandating window restrictors, floor coverings and door chains.
Bringing the minority of non-decent homes in the PRS up to standard would be a clear win for the tenants living in them. However, the cost of upgrades could also push more landlords out of the market, especially taken alongside the cost of upgrading properties to EPC C. Research by Reapit found that it would cost £24 billion to bring all PRS homes up to EPC C, an average £10,442 each.
Enforcement by councils could also be an issue. Reapit also found that, of the major councils it contacted, only three had fined landlords for failing to meet the current minimum EPC of E, even though the law has been in force since 2020. Most councils also didn’t know how many local properties were exempt from the minimum. If councils also fail to enforce the Decent Homes Standard, it could mean that law-abiding landlords spend big on upgrades while rogues still fly under the radar.
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