Landlords believe that energy efficiency upgrades required to comply with Net Zero regulations may cost up to £10,400 per property.
From 2025 all newly rented properties must have an EPC rating of at least ‘C’. This deadline is extended to 2028 for existing tenancies.
Failure to comply will lead to a property becoming illegal to let and possible fines for non-compliant landlords.
Specialist buy to let lender Aldermore conducted a survey of 800 active landlords, finding that 62 per cent are “fully aware” of the new legislation and 25 per cent are “somewhat aware”.
It’s estimated that 40 per cent of private rental properties have an EPC rate of ‘D’ or lower.
Landlords with properties below ‘C’ believe it will cost an average of £10,400 per property.
To pay for this, 71 per cent of landlords intend to use savings, while 25 per cent hope for government funding. Nearly a quarter – 23 per cent – say they will increase rent.
Aldermore’s report also states that new build may become investors’ first choice because 65 per cent of landlords say they are now unlikely to buy a property with an EPC of ‘D’ at most.
Aldermore director of mortgage distribution Jon Cooper says: “With people’s lives revolving more around their homes than ever before, a robust private rented sector has never been more vital.
“The data suggests the looming EPC change will cause challenges, but the more support landlords receive from brokers and lenders now, the easier it will be to navigate.
“Encouragingly, awareness appears high among landlords so many will be thinking about what changes may need to be done already. As we move towards a post-pandemic environment, many landlords will be looking to the future, so it is the perfect opportunity for brokers to have conversations with their clients about the EPC ratings.
“This will ensure, where needed, a plan for financing can be mapped out to assist landlords in getting non-compliant properties up to standard.”
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