The draconian new rules governing EPC targets are driving some landlords to favour new build properties when expanding their portfolios.

That appears to be the case according to new research from lettings agency Hamptons which says its research suggests a significant switch to newer properties by landlords.

These newer units are a Band C or better in terms of EPCs.

Since 2008 landlords letting whole properties have had to have a valid EPC rated at E or above to provide to prospective tenants. 

EPCs are valid for 10 years. After this time, landlords are only required to get a new EPC if they are re-letting to a new tenant.

However the government proposes that rental properties meet a compulsory energy performance certificate rating of band C on new tenancies by December 2025, and on all rented properties by December 2028. 

Hamptons says 50 per cent of properties bought by landlords so far in 2022 have an EPC rating of at least C; this compares to 39 per cent in 2021 and 33 per cent in 2020.

“Given it will prove impossible for all homes to secure an EPC rating of at least a C without significant cost, it’s likely to mean older homes will become considerably less attractive to landlords” says Aneisha Beveridge, Head of Research at Hamptons.

“By removing the least energy-efficient rental homes from the market, government policy has already picked the lowest hanging fruit. 

“But extending this plan to upgrade homes with a D or E rating up to C will impact a far larger number of households, while generating smaller savings for tenants.

“The policy will mean that the average tenant will eventually pay lower energy bills than the average homeowner, although it’s likely to remove some rental homes from the market, putting further pressure on stock levels.”