This cannot be correct – most landlords favour high minimum EPC ratings

According to research from Handelsbanken, a significant majority of landlords are in favour of stricter regulations to raise the minimum Energy Performance Certificate (EPC) rating to A for both residential and commercial lettings, the highest achievable level. This finding reflects a growing trend among tenants demanding sustainable features in their rental properties, such as heat pumps, solar generation, and electric vehicle (EV) chargers.

Key insights from Handelsbanken’s annual Property Investor Report, based on responses from UK property investors averaging 35 properties each, highlight that 72% of landlords support raising the EPC rating to A. This sentiment underscores a broader acknowledgment among property investors of the long-term benefits of maximizing energy efficiency across their portfolios. These benefits include locking in property value, reducing operational costs, and enhancing tenant attraction and retention.

The report also reveals that 92% of landlords have received requests from tenants for sustainable property features, with 28% specifically asking for EV chargers. Furthermore, three in five tenants (58%) have expressed a preference for properties with an EPC rating of C or higher. In London, where energy costs are notably high, this preference rises significantly to 88% of tenants seeking properties with a higher EPC rating.

Despite previous government plans to mandate a minimum EPC rating of C for existing residential rentals by 2028 being scrapped in September of the previous year, the survey indicates that while some investors scaled back their investment plans (25%), a substantial portion (44%) are continuing with their original commitments to enhance energy efficiency in their properties.

Richard Winder, UK Head of Sustainability at Handelsbanken, emphasizes that investors are increasingly aligning with sustainability standards not only to comply with regulations but also to capitalize on the commercial advantages associated with higher EPC-rated properties. Properties with superior energy efficiency ratings tend to enjoy longer lease lengths, contributing to stable income streams for investors.

Overall, the findings underscore a significant shift in the property investment landscape towards sustainability-driven strategies, driven by tenant demand and long-term financial benefits.

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