Supporting landlords through regulatory reform – Sedgwick

Policymakers at the Ministry of Housing, Communities and Local Government (MHCLG) have launched a consultation to reform the DHS. The consultation’s foreword highlights how the regulations set out to ensure tenants feel safe, secure and proud of their homes, and landlords have a clear understanding of the standards they are expected to uphold.

Few will disagree with these aims, but successful implementation is key.

Poorly executed reforms risk unintended consequences, complicating an already complex and seemingly ever-evolving regulatory landscape could influence landlords to exit the sector, exacerbating the supply-demand imbalance that has fuelled rent inflation and limited tenant choice.

Like other business owners, landlords need certainty so they can plan effectively, make informed investment decisions and adapt their business models to meet future requirements.

The MHCLG acknowledges this, but proposals to change one aspect of governance within a broader regulatory overhaul add another layer of ambiguity.

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Proposed changes to EPCs causing uncertainty

A prime example is the uncertainty surrounding proposed changes to Energy Performance Certificate (EPC) metrics. Many landlords are hesitant to invest in property upgrades without knowing whether those improvements will align with future Minimum Energy Efficiency Standards (MEES).

This highlights the need for clear guidance and practical support throughout the regulatory change process.

There is an opportunity for lenders and sector partners to support landlords, not only through finance but also by helping them navigate regulatory changes. Acting as a resource and offering advice can strengthen relationships and foster a more resilient PRS.

Looking at the DHS proposals, responsible landlords are unlikely to struggle to meet the new standards. Mortgaged properties, in particular, are subject to rigorous underwriting that minimises the financial and reputational risk of lending on poor-quality housing. Considering this, we believe that most properties failing to meet current standards are likely to be unmortgaged and legacy, older stock.

This view is supported by findings from our Standards and Sustainability in the PRS report, which revealed that Paragon landlords actively seek out properties requiring refurbishment, investing an average of £8,500 per property. This investment has helped improve PRS stock quality. In 2005, 41% of PRS homes were deemed non-decent, a figure that had fallen to 21% by 2023, coinciding with the rise in buy-to-let (BTL) lending.

While challenges remain, this progress suggests that most landlords take pride in their properties and are committed to maintaining high standards.

Changes from the Renters’ Rights Bill are concerning

Our research also explored landlord concerns regarding the Renters’ Rights Bill. The removal of Section 21 evictions and extended notice periods for rent arrears under Section 8 were cited by 71% of landlords as their top concerns. These two facets of the bill far outweighed worries about the DHS application (3%), Awaab’s Law (8%) or the introduction of a PRS ombudsman (9%).

This shows landlords are focused on protecting their rights when tenancies go wrong, rather than resisting higher property standards.

If reforms fail to balance tenant protections with landlord rights, we risk worsening the supply-demand imbalance, ultimately to the detriment of tenants.

To ensure a thriving PRS, landlords must be supported, not just regulated. Certainty, clarity and collaboration will be key.