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Energy Bills - New EPC targets to cost landlords over £10k per unit

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.

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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.”

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

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    For the life of me I can't understand what all the fuss is about landlords not being able to improve the energy efficiency (and therefore the EPC) of their investment buildings. I, like thousands of other professional landlords, realised this when EPCs were introduced way back in 2008. It not like the Government has sprung it on us!
    Over the years I've been spending some of my annual rental income on improving loft insulation and cavity wall insulation. I've used external wall insulation on one of my properties - the EPC up-lift for me and energy cost saving for the tenant have been extremely good.
    I've recently installed Dimplex Quantum night storage heaters in a rental flat. I've helped my tenant sign-up to an off-peak electricity tariff, which is a fraction of the cost of expensive 'day time' electricity'. Night storage heaters have come on massively since the 1980s and retain the heat all day whilst the tenant is out at work. It's a pile of bricks in a steel box and is ideal for rental homes where the tenant can be less than careful.
    A domestic EPC is an energy COST calculation, the worse the Grade the more my tenant has to pay to the NPower, British Gas (and indirectly the Qatari Royal Family and Vladimir Putin) and the less money they have to pay my rent. It makes good financial sense to drive down the money my tenants have to pay in energy costs. Don't landlords on this Blog understand this? Every single resi landlord mate of mine in the Thames Valley has either fixed-up their houses and flats to EPC Grade C or long since sold their 'difficult' assets and reinvested the capital in energy efficient homes (which can indeed be both older or modern buildings)
    For me and other professional landlords this simply is not an issue and not a problem. Relaxing Planning regulations so I and others can build a few more houses and flats for renters would be a far better issue for us all to campaign on.
    Domestic EPCs and MEES is NOT what rational landlords worry about.

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    How did you know in 2008, when EPCs were introduced that EPC C was going to be sprung on LLs from 2025 onwards? You must have had a crystal ball that the rest of us didn't. Certainly in Nottingham developers have recently converted buildings into flats with a max EPC D - so they clearly didn't have your foresight.

    I think you will find that EPC & MEES is actually exactly what a lot of smaller LLs worry about!

     
    Keith  Johnson

    Is this about energy efficiency, or the running cost? As I don't understand how changing to night storage heaters is reducing their carbon footprint
    Why are you marked up for a gas combi heating system, but marked down on electric heating, when electric heating is 100% efficient? EPC is flawed

     
    Theodor Cable

    And what can I do with no cavity walls...!
    And because of that, I will never be able to let, or sell, such a house as it will never reach the necessary EPC requirements.

    And then what do I do with it? Demolish it and sell just the land?

     
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    Good for you... Aren't you the perfect landlord. Ffs!

     
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    I’m a professional landlord too of 25 years. I regularly spend tens of thousands on each refurbishment I do, which has been as high as 7 houses a year going back to brick. These properties are upgraded to the latest standards as they go, yet in no time at all fall behind new legislative and requirement updates. I’m now told I have to get floors dug up to install floor insulation which - hilariously - is shown as £6000 cost to save £37 a year!! I don’t know what kind of berk wrote that with a straight face, but it’s not an investment I, or anyone with a brain, should be inclined to make!

     
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    Stop clapping yourself on the back it’s a massive problem & cost for LL’s out here not alone the scale of works with Tenants insitu. I hope you didn’t claim relief on Capital expenditure.

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    How many times as he addressed himself as a professional landlord ? certainly making himself out to be a very arrogant one.

     
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    EPC assessors need to put far more thought into the list of recommendations they issue to improve our EPCs. The EPC states the improvements listed are cumulative. They assume the improvements have been installed in the order listed. That is a major problem when they put the most expensive, disruptive, impractical, least effective recommendations at the top of the list.

    One of my houses is a 2 bed terraced house in a flood zone about 300 meters from the sea. The kitchen is very narrow and has 3 external walls, one of which forms the neighbours garden wall, another adjoins a footpath.
    The recommendations are:
    1 - internal or external wall insulation. It would have to be internal for at least 2 of the walls, which would make the kitchen too narrow to use. Estimated cost £4000 to £14000. Adds 5 points. Presumably that cost doesn't include the cost of the new kitchen and bathroom that would be required to fit the reduced space. The tenant would need to move out for the work to be done.
    2 - floor insulation (suspended floor). In a flood zone is that really sensible? Costs £800 to £1200. Only adds 1 point.
    3 - solar water heating. Costs £4000 to £6000. Adds 1 point
    4 - solar photovoltaic panels. Costs £3500 to £5500. Adds 10 points.

    In a tenanted property with a South facing roof the solar photovoltaic panels seem like the way to go. Why isn't it the number one recommendation?

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    Unfortunately it is the algorithm that spits out the recommendation - no room for common sense.

     
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    Once again proposals have been reported as fact! The bill has not been published, yet alone passed so we do not know what it is going to say.

    Sloppy Reporting!

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    Well this article makes no sense to me, a lot of the LL's i know have a couple of properties and will NOT be spending the amounts of cash quoted, we are all around the same age and we will be looking to retire in the next 5 years. We are selling, not a hope in hell will we get back the sums mentioned ie ROI, so it looks like the FTB market is in for a good selection of new properties coming to the market. I agree that this is not yet set in stone but i cannot see how it will be avoided, we have made our promise to the green lobby of net zero and there is no way back from that, we will simply be collateral damage. It is not the end of the world for myself or my friends, we have fully mortgage free properties to sell and spend the gains as we wish..... our tenants though, they will be evicted and have to find a new home in an increasingly hostile market place, i do feel genuine sadness for them but i am not making a poor financial decision (to keep the properties) when that goes against what is best for my family. Sad.

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    I just had the EPC renewed on a 1929 built 3 bed semi, with solid brick walls, A rated boiler, fully double glazed, uprated loft insulation and low energy lighting. To move that from a D to a C rating apparently requires the concrete floor slab to be dug up and relaid with 150mm insulation, that involves removing the kitchen and cloakroom, demolishing and rebuilding internal walls, and then adding another layer to the external elevations. Estimated cost in excess of 60k with maximum potential savings of £350 a year. I had solar heating in another house, that cost £6k to install, potential savings of £90 a year wiped out by the cost of running the pump and the annual service
    charge to keep the warranty in place - completely pointless.

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    I know that I have a problem with couple of Victorian properties with 9” solid beautiful timeless yellow stock bricks walls with Architectural features. It would be vandalism to cover them up with external insulation cladding and extremely difficult to do inside considering that I have already modernised and up dated years ago to comply with the then Building Regulation’s of 1991 when EPC ‘C’ wasn’t asked for or required. I have the completion Certificate’s to verify this. That’s enough about mine but from what I know about Nottingham in the 60’s / 70’s many of those ones have a bigger problem as huge numbers were of pre-cast concrete construction, hence we used to call it Bison City no offence.

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    Have the results of the consultation now finally been published then?

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    It's hilarious to see all these greedy landlords rant about the cost of upgrading their properties ^^
    Even better when none of you gets that it's not about saving COSTS (money money, is it all you understand?) but saving ENERGY (less energy required overall, over many many years long after the planet's rid of you for good).
    It's also about comfort of not having drafty windows all over your house and being told it's fine...
    Looking forward to seeing your properties on the market for peanuts :)

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    Buy your own put in all the Insulations you want, don’t expect others to do it for you, seal everything up tight and suffocate, you’ll all be like hatching hens, and the more warmer and softer you become the more heat you’ll need, careful a bit of fresh air might kill you.

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    Let's take a step back - does energy conservation work? I I would like to do my bit to save the Planet and at the same time save on my heating costs and I have tried numerous energy conservation measures in over 150 of my hmos where I provide 24/7 heating and hot water. Unlike most landlords I keep a weekly log of the energy used by taking the metre readings and I cannot identify any change in the energy used or the before-and-after performance of the property after fitting conservation measures

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    There will never be a saving when someone else pays the Bill.

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    I remember, back in the 70's, my dad put a curtain across the living room so when he was sitting in there he only needed to heat half the room. Then he put a curtain across the bottom of the stairs so the heat would not go upstairs.

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    I grew up in the 50s and 60s, just the same we heated one room with a coal fire and all sat around it

     
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    My grandparents had just one coal fire in the 70's, it even heated the hot water. They just sat near it...

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