Can landlords meet the new energy requirements?

With less than four years left until the Government wants all new private rented tenancies to be in properties with at least an Energy Performance Certificate (EPC) rating of ‘C’, new research from The Mortgage Works  has uncovered a lack of confidence from landlords about bringing their properties up to the required standard in time.

Current legislation in England and Wales requires buy to let properties to have at least an EPC rating of ‘E’ or above. However, in order to improve the energy efficiency of rental properties, the Government wants to increase the requirement to a ‘C’ rating for all new tenancies by 2025 and for all existing tenancies by 2028.

According to the poll of around 750 landlords, more than a third (35%) say they are not confident they will be able to bring their properties up to the required energy efficiency standard.

This is not only due to a lack of available capital but also a lack of awareness regarding what it takes to achieve that ‘C’ rating.

The research highlights a number of challenges facing landlords in their attempts to meet the new sustainability requirements. The biggest issue faced is perceived property constraints, which more than half (51%) think will be a hurdle. Just one in ten (10%) don’t anticipate facing any challenges in this regard.

Landlords with larger property portfolios were more likely to face potential challenges than those with a smaller number of properties, especially when it comes to property constraints: 66% for those with 11+ properties vs 49% with 1-10 properties.

The same applied to access (50% vs 43%) and disruption (50% vs 43%).

More than six in ten (61%) landlords say, unsurprisingly, that they will need to spend money to get their properties up to an EPC ‘C’ standard.

More than one in ten (14%) of them say they will need to spend all of their annual rental income, and perhaps even more than that, on making the improvements to their properties.

However, a larger proportion of landlords don’t feel they will need to spend as much with nearly a third (29%) saying they will need to spend less than 30 per cent of their annual rental income.

Nearly one five (17%) won’t need to spend anything at all – though the survey is silent as to why this should be.

Even if the money is available, around one in ten (11%) landlords admit they have no idea of what work is required and don’t know where to start. Whereas around four in ten (41%) say they have either a good or clear idea on what to do. That figure increases to more than half (55%) of those with 20 or more properties in their portfolio.

More than a quarter (27%) of landlords say a lack of funds is one of the biggest challenges they face.



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