Are you ready for the proposed EPC regulations?
According to Shawbrook Bank’s latest report, Confronting the EPC Challenge*, close to a quarter of landlords surveyed say that their properties have an Energy Performance Certificate (EPC) rating of D or below. However, the number could be higher with a further quarter (27%) of landlords admitting they don’t currently know the EPC rating of their properties.
This could prove a challenge to the private rented sector, as under proposed regulations, landlords may be required to make changes to their properties to improve their energy efficiency rating by 2025 for all new tenancies, and by 2028 for existing tenancies. Should landlords be unable to make changes to their properties by the deadline, they may be unable to rent their properties so could be left with properties that are unmortgageable and therefore unsellable.
For landlords with older properties, making these improvements could be a costly exercise. Older homes are more likely to have a lower EPC rating and require improvement. 30% of landlords with Victorian era properties in their portfolio said they were rated D or below.
Currently, two in ten landlords that we spoke to don’t have the necessary funds required to begin refurbishments of their properties. This is particularly the case with older landlords – those aged over 55. A quarter of this group said they don’t currently have the funds available to make changes to their properties to bring them in line with the proposed requirements.
Many landlords are yet to make changes to their properties. The English Housing Survey found that there has not been an increase in energy efficiency among housing stock in the private rented sector over the last year – despite an increase in housing stock in England overall.
In order to make changes in time for the proposed deadline, landlords have expressed the need for support from the government and industry. Close to half of landlords said they would benefit from guidance on what the EPC legislation means specifically for them, while 37% want to see incentives to make changes such as favourable borrowing rates.
Shawbrook Bank contracted Opinium to undertake research between 18th and 25th November 2021 to understand landlords awareness of the upcoming changes to the Energy Performance Certification (EPC), which will require properties to be rated ‘C’ or above by 2025 in order to begin a new tenancy. A total 1,000 UK landlords were surveyed.