The new rules

In a significant regulatory shift, the UK government has confirmed that all privately and socially rented homes must adhere to an updated Decent Homes Standard (DHS) by 2035. This marks the first time minimum housing quality standards will apply uniformly across both sectors. The revised DHS sets forth clear expectations regarding property condition, including adequate repairs, remediation of damp and mould, and improved energy efficiency. The extended deadline aims to give landlords ample time to plan necessary investments while maintaining housing supply.

Current statistics reveal that 21 percent of homes in the private rented sector do not meet the Decent Homes criteria, compared to 10 percent in social housing. The government’s Housing Minister, Matthew Pennycook, stated that the updated DHS intends to reflect modern expectations of housing standards and to provide clarity for landlords. The implications for compliance with the DHS are compounded by existing energy performance regulations, particularly the requirement for minimum Energy Performance Certificate (EPC) ratings.

Impact on landlords

With over 50 percent of private rented homes currently rated below EPC band C, landlords face a daunting £20 billion refurbishment challenge to meet the upcoming 2030 deadline. Research by Octane Capital indicates that 2.48 million properties require substantial upgrades to comply with the EPC C requirement. The median cost for these upgrades is estimated at £8,017 per home, translating to a significant financial burden for landlords who must now navigate overlapping compliance pressures from both the DHS and EPC regulations.

The impending requirement for properties to achieve EPC band C by 2030 will necessitate various improvements, such as enhancing insulation, upgrading heating systems, and implementing energy-efficient lighting solutions. The financial implications are particularly severe for portfolio landlords, who may face cumulative costs exceeding £80,000 for multiple properties needing upgrades.

The government’s decision to delay the EPC C requirement from 2028 to 2030 has provided some breathing space, but it has not alleviated the urgency of the situation. Landlords must now plan for both the DHS and EPC compliance simultaneously, ensuring that property improvements are executed efficiently to mitigate the risk of supply reductions in the rental market.

Market reaction

Industry bodies have expressed mixed reactions to the government's announcement regarding the Decent Homes Standard. The National Residential Landlords Association (NRLA) welcomed the clarity provided by the new regulations. Chief Executive Ben Beadle emphasised that ensuring safe and decent living conditions should be the top priority for landlords. However, there is concern regarding the effectiveness of enforcement, as many local authorities may lack the capacity to pursue non-compliant landlords vigorously.

In contrast, tenant advocacy groups have been vocal in their criticism. Shelter’s Chief Executive, Sarah Elliott, condemned the timeline as excessively lenient, arguing that renters should not have to wait until 2035 for basic protections against substandard housing. This sentiment was echoed by other activists and politicians who advocate for more immediate action to improve housing quality for tenants.

The overlapping compliance landscape

The intersection of the Decent Homes Standard and EPC regulations creates a complex compliance landscape for landlords. Many landlords already face significant pressures to upgrade properties to meet existing health, safety, and energy efficiency standards. The updated DHS consolidates these requirements into a single enforceable benchmark, emphasising the need for timely and strategic planning for property improvements.

As landlords begin to strategise for the upcoming changes, they must consider how to finance the necessary upgrades. Short-term refurbishment loans may become increasingly important as landlords seek to manage cash flow during this transition. The potential for increased borrowing costs could further complicate the financial landscape, especially for those landlords managing older properties that require extensive renovations.

Landlords who delay planning for these upgrades risk facing higher costs and fewer options as deadlines approach. The urgency of compliance with both the Decent Homes Standard and EPC regulations necessitates a proactive approach by landlords to ensure their properties remain viable in a changing regulatory environment.