At least a quarter of rental properties have an EPC rating of D or below fuelling concerns the market could face challenges when new energy rules come into effect.
This is according to a survey by Shawbrook Bank which also found landlords would welcome guidance and incentives to help them achieve the new targets.
By 2025 a property’s Energy Performance Certificate (EPC) should be up to a C or above before it can be let for new tenants, the government is proposing. Landlords have until 2028 to increase the rating for existing tenancies.
But Shawbrook’s research found not only did 23% of landlords have properties rated D or below, it also thinks the numbers could be higher because 27% admitted they didn’t know the EPC rating.
Many were also worried about finding the funds for the improvements.
“The UK has a significant proportion of older properties that are particularly challenging to improve, and many landlords remain in the dark as to their properties’ current ratings.”
Older homes were more likely to have a lower EPC rating and would therefore require improvement. In fact, 30% of landlords with Victorian era properties in their portfolio said they were rated D or below, said Shawbrook.
Support and incentives
In order to make changes in time for the proposed deadline, landlords surveyed asked for support from the government and industry.
Nearly half of landlords said they would benefit from guidance on what the EPC legislation meant for them and 37% wanted to see incentives to make changes, such as favourable borrowing rates.
Many also wanted guidance on timings and how to phase the implementation of changes, as well as signposting to suppliers who could help them make improvements to their properties.
The same proportion also wanted to receive guidance on how to manage tenants during the improvement process.
Landlords were also interested in speaking with other landlords about the issue, with 21% looking for a shared space to discuss problems and share solutions.
In response to this, Shawbrook has established a working group of industry professionals, landlords and policy makers together to find possible shared solutions to the challenge.
Emma added: “Landlords will require further support from both the industry and the government in order to make the changes in good time.
“Indeed, with the cost of labour and supplies rising, it could be a costly exercise for all landlords, but there are solutions available.
“It is in everyone’s interest that properties are made more energy efficient, however this cannot be done half-heartedly, and we must ensure sufficient resources are provided so that landlords can make the appropriate changes to benefit their properties and their tenants.
“We hope that our forthcoming working group provides a space for landlords and the wider industry to share ideas and solutions to confront this challenge, and we look forward to sharing the findings in the coming weeks and months.”