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Author: Rent Guarantor


The Government has published its outline for improving energy efficiency in the UK's stock of private rental sector (PRS) homes as part of a commitment to improve the energy performance certificate (EPC) rating to Band C by 2030. However, the expectations for new rental properties to have a Band C EPC by 2025 and all properties to have the same by 2028 - excluding exemptions - has been described as unachievable by ARLA Propertymark.

However, while even more demands are being made of the PRS on the one hand, it appears that letting agents may have been let off the hook with regards to referral fees transparency rules. While referral fees have been detailed as a topic that requires more clear explanation, this recent recommendation only applies to the sales market and not lettings.

Energy efficiency targets in the PRS

In its newly proposed energy efficiency targets for the PRS, the government describes the plans as bringing significant benefits to landlords and tenants. However, while energy efficiency is an important element across all industries in the UK, ARLA points out that much of the UK’s housing stock would require a lot of work to bring them up to a Band C rating.

“On the face of it, these proposals simply do not take into account the state of the UK's housing stock,” said Timothy Douglas, Arla’s Policy and Campaigns Manager. “We all want to see more energy-efficient homes, but the new rules and requirements must be realistic and achievable.”

While improved energy efficiency of a home means lower energy bills and an important step in lowering emission across the UK, landlords, letting agents and tenants are all currently coping with recently introduced rules and regulations as well as the effects of the Covid-19 pandemic. That means that even though more energy efficient homes in the PRS would benefit everyone, allowing so little time and so few exemptions and support in the current environment makes it a less achievable prospect.

Indeed, according to Arla, should these proposals go ahead in their current form it could result in more landlords leaving the industry, leaving fewer rental homes available for the growing number of tenants across the UK and potentially pushing prices up further.

Are letting agents exempt from new referral fees rules?

Meanwhile, as landlords await further information on energy efficiency targets in 2021, some potential good news has hit for letting agents. The latest review of referral fees across the UK housing market has resulted in the National Trading Standards Estate and Letting Agency Team (NTSELAT) stating that more transparency around referral fees is required during property sales – no mention was made of letting agents.

While that could simply be an oversight by NTSELAT, it could also mean that referral fees in the lettings market are already clear. Or, that they’re not yet in the firing line for more action right now.

Whatever the case, it appears that even though most letting agents likely already clearly advertise their referral rules and fees, those who don’t won’t be under pressure any time soon to make changes to their current procedures.

However, while this could be considered good news for letting agents as it means they don’t have any work to do on this topic, for now, it could prove a little less positive for tenants. Where a tenant is renting through an agent who doesn’t have clear guidance on referral fees, they could face unexpected additional costs when moving into a new rental home. Looking ahead, it’s likely that letting agents will be included in any referral fee transparency requirements, but exactly when that might be currently remains unclear.