Thousands of landlords are unprepared for new energy efficiency measures being introduced in just days, and many are taking properties off the market to gain more time to implement changes, ARLA Propertymark claims.
Fines of up to £4,000 can be issued from April 1 if landlords are found to be renting out new lets with an Energy Performance Certificate (EPC) rating below E.
The rules will apply to all rental properties from 2020.
But David Cox, chief executive of ARLA Propertymark, said thousands won’t meet the deadline.
He said: “On Sunday April 1st, all rented properties on new lets including renewals will be required to comply with the Government’s minimum energy efficiency standards.
“This will ensure tenants have better quality and better insulated homes, as every buy-to-let will be minimum EPC rated E – but there are thousands of landlords who aren’t ready for the deadline.
“While the number of properties which are EPC rated F or G has fallen dramatically from 700,000 in 2012 to 300,000 today, many landlords are yet to prepare their properties for the new laws.
“Sunday’s deadline means they’ll either face fines of up to £4,000 or lose money on empty properties which cannot be let until they meet the standards. Either way, it’s another kick in the teeth for hard-working landlords, and tenants looking to find affordable accommodation.”
It comes as data from ARLA Propertymark shows the supply of rental stock has hit a 21-month low.
The trade body’s February Private Rented Sector Report found that the number of rental properties managed by members fell by 5% in February, with 175 on average per branch compared to 184 in January.
This is the lowest level of supply since May 2016 when it stood at 171.
In comparison, in the same period last year letting agents managed 183 properties on average per branch, 176 on average in February 2016 and 184 on average per branch in February 2015.
Demand for rental accommodation also dipped in February to 61 prospective tenants from 70 a month before.
Cox added that the dip in supply may be a result of the EPC changes.
He said: “This month’s results continue to show a drop in the supply of rental properties and this is no surprise; the minimum energy efficiency standards come into effect in April meaning all rental properties must be EPC rated E or above.
“The dip in supply indicates that landlords are cutting it fine and taking their properties off the market to make the necessary changes before the deadline – but we could also see up to 300,000 properties taken off the market after the deadline passes on Sunday because they don’t reach the minimum requirements.
“This is also likely to push rent costs up as competition heats up among prospective tenants. We could have a supply crisis on our hands, and for landlords who haven’t yet started to upgrade their properties, now is the time to act and fast.”
Meanwhile, the latest Your Move Rental Tracker for England and Wales shows rents rose 3% annually in February to £857 per month on average.
All but two regions – London and the North-East – registered annual falls in rents over the month, Your Move says.
The East of England and the East Midlands saw rents rise faster than anywhere else at 2.9% each to £894 and £652 per month respectively.
London remained the most expensive area to rent at £1,276 a month, down 0.3% annually. The North-East kept its place as the cheapest region for renting, with prices down 2% to £535 a month.
Martyn Alderton, national lettings director at Your Move, said: “While much of the UK was snowed under at the end of the month, February proved to be another positive month for the rental market.
“Areas outside of London continued their strong recent growth, with impressive performances in the East of England and the East Midlands.
“Landlords are also enjoying more stability than they have been in recent times. This suggests that a recent squeeze on landlords’ profits could be coming to an end, which is good news for those looking to invest during 2018.”