Over two-thirds of UK landlords are yet to meet the proposed EPC Band C targets, sparking widespread concern.
- Foundation Home Loans released research showing 67% of landlords have properties below the required EPC standards.
- The UK government plans to require all rented properties to achieve at least an EPC Band C rating by 2030.
- Many landlords demonstrate awareness of EPC standards, but a complete understanding is less common.
- Funding improvements remains a critical issue, with landlords considering savings, rent increases, and government support.
Recent findings by Foundation Home Loans indicate that a significant 67% of UK landlords currently own properties that fall short of the government’s proposed Energy Performance Certificate (EPC) Band C standards. This research, conducted as part of the Q3 2024 Landlord Trends study by Pegasus Insight, involved 720 online interviews and reflects growing concerns in the rental market.
The UK government has announced its intention to consult on new regulations that would mandate private and social rented properties to meet EPC Band C by 2030. Presently, private rented homes can be let with an EPC Band E rating, while social rented homes have no minimum energy efficiency requirement. This potential policy change underscores the need for landlords to enhance the energy efficiency of their properties significantly.
Awareness regarding EPC standards is relatively high among landlords, with 92% of them having some knowledge of the requirements. However, only 67% claim a thorough understanding. Notably, landlords with multiple buy-to-let mortgages display slightly less comprehension, with only 62% confident of their understanding compared to 69% of those without mortgages or consumer borrowers.
When it comes to compliance strategies, 42% of landlords have expressed intentions to upgrade their properties to meet the proposed standards. Within this group, 24% plan to implement low-cost measures to comply, 14% aim for improvements that would boost long-term property value, and 3% intend to bring properties up to standard before selling. On the other hand, 34% are opting to sell their properties without making improvements, and a small portion, 3%, plans to continue letting their properties without any upgrades.
Landlords face considerable financial challenges in funding these improvements, with many planning to use personal savings (71%), increase rent (42%), or seek government grants (28%). Additionally, 12% are considering releasing equity from their portfolios, while 5% look towards securing further mortgage advances or loans. The estimated average cost per property to reach an EPC ‘C’ standard is approximately £12,000.
The types of upgrades landlords are considering include solid wall or floor insulation (37%), loft insulation (26%), boiler or heating system updates (25%), and the installation of solar panels (22%). Despite this, a portion of landlords remain uncertain about the specific improvements required (13%) and the overall potential costs involved (37%).
Grant Hendry, director of sales at Foundation Home Loans, highlights the importance of these findings, stating: “With potential new legislation aiming to raise energy efficiency standards and tackle fuel poverty for millions, landlords face important decisions around future-proofing their investments from an EPC perspective.” This research also points to the need for supportive financing options, such as green mortgages, to help landlords navigate these changes effectively.
As landlords prepare to meet stricter EPC standards, they face significant financial and strategic decisions to future-proof their investments.
