Page 2791 - Week 08 - Wednesday, 21 September 2022
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• the impact on annual rental returns is likely to be small for most investors. (page 49-50).
• There are also some potentially beneficial impacts for rental providers (page 51):
- capital appreciation of properties due to improvements in thermal comfort and energy efficiency;
- greater tenant retention in more comfortable houses; and
- greater security of rental income with tenants experiencing reduced financial stress due to lower energy costs.
• The analysis of rental returns, as well as the results of a survey of rental providers undertaken as part of the RIS, suggest that the proposed standard will not drive large numbers of rental providers to withdraw their property from the rental market. But even where rental providers sell their property, the nett housing stock available for rent is not likely to be significantly impacted as rental properties sold will either be rented out or redeveloped by the new owner if an investor or will free up other housing stock if the new owner is an owner-occupier. (pages 53-54).
Measures to mitigate the potential for impacts on the rental market from the introduction of the minimum standard are also being considered in the design and implementation of the standard, such as:
• The standard is likely to focus on only the worst performing properties – those with no or only very poor insulation. The majority of rental properties will already meet the standard.
• There will be exemptions where installation of insulation is not feasible.
• The requirement to meet the standard will be staggered over a phase-in period of several years, with rental providers being given plenty of time to comply.
• Support for rental providers to meet the upfront cost of installing the insulation is also being considered.
Full details will be available when the regulation introducing the standard is ready to be announced.
In addition, a monitoring and evaluation plan for the introduction of the standard is being developed and will be implemented over the phase-in period. It will include monitoring to determine and assess any changes to the rental market over this time.
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