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Energy Gap - landlords cannot afford to fund essential upgrades

There’s a gulf in the amount that landlords are willing to pay to meet proposed new EPC requirements and what they are actually to cost.   

A survey of landlords, carried out on behalf of Paragon Bank, has found that just over three quarters of landlords are willing to spend up to £3,000 to upgrade each property they own to EPC C in order to meet new regulations proposed by the Government. But further analysis by the specialist mortgage lender reveals that 78 per cent of landlords would need to spend over this amount.

Taking into account the government’s proposed cap of £10,000 per property, the average cost to upgrade each property to EPC C is £10,560, according to Paragon’s analysis.


The bank’s latest report has been examining the potential impact on the private rented sector of proposed regulations that, if passed into law, will require all properties let for new tenancies to be rated EPC A-C by 2025, extending to all tenancies by 2028.

The report also includes insight on how buy to let property investors would fund the works. 

Six in 10 said that they would use savings, making it the most popular source of potential finance, followed by just over a quarter who said that they would increase rent. Almost one in five would rely on government funding, and just under one in 10 would utilise a further advance from a mortgage lender or take out loan, or would release equity from their portfolio. 

Just over two thirds of landlords surveyed stating that they are less likely to purchase homes with EPC ratings of D or lower in the future as a result of the potential regulations. Just over one in five said that it would make no difference to their future acquisitions and four per cent said that they would be more likely to purchase a property if it was rated below EPC C.

The bank’s mortgage managing director, Richard Rowntree, says: “It is encouraging to see that landlords anticipate that future portfolio expansion will target properties rated EPC C or above, bringing more energy efficient properties into the PRS. Paragon is one of a number of lenders to offer favourable rates that provide a financial incentive to this.

“Of course, this is only part of the issue as data shows that a large proportion of current PRS stock is below the standard required by the proposed new regulations.

“The apparent disparity in what it is likely to cost to meet these standards and what landlords are willing to spend helps to illustrate the financial challenge the new regulations would pose to buy-to-let investors.

“There remains a lot of uncertainty around the proposals, so the sector needs some clear guidance from the Government. With this, my hope is that landlords will have a better understanding of how the new regulations would impact them and the resulting financial support they would require.”

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    😂😂 So Paragon, a firm who supplies financial services for us lot, says we are all for borrowing more money to make energy efficiency changes to our properties, that the rest of the country don’t have too 🤔🤔….. spare me 😭😭 this article is just marketing by Paragon, I will be selling the lot, and my excellent tenants will be banging on the doors of the town hall.

  • icon

    Yes, Simon, you are right. There are quite a lot of articles published by those with a vested interest - and also posts made by some contributors to this site which are designed to influence landlords in the way which the Government wants them to act. Important to be aware of that, I think, and use one's own judgment about everything.

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    I will decide on a one by one basis how much, if anything, I'm prepared to spend, and by how much I will be increasing rents when I know the full facts, this all pie in the sky at the present time

  • George Dawes

    Since the uk contributes c 1% of the supposedly deadly co2 , I don’t see how on earth anything we do will make any difference at all apart from bankruptcy for a lot of landlords

    Which is obviously the intention

  • George Dawes

    If you google co2 there’s a 15 page pdf showing the benefits of this supposed dangerous greenhouse gas … without which life on earth wouldn’t exist …

    The whole thing is yet another scam ….

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    The main problem with EPCs is that they list the most expensive, impractical suggestions first and often don't mention the far more cost effective options that would get the properly to a C. We don't even know if C is the target yet.

    One of mine says install solid floor insulation and a gas boiler at a cost of between £7K and £13K. The EPC assessor emailed me after to say ignore all that, replacing the old night storage heater with a Dimplex Quantum at a cost of about £1500 would be sufficient.
    Another one suggests internal or external wall insulation and solar water heating at a cost of between £8K and £20K. The wall insulation is completely impractical as it would either encroach on other people's land or make an already narrow kitchen too small to open the oven door. Solar PV would cost about £5K and be of very noticeable benefit to the tenant.
    A few of mine have flat roofs and assessors are very keen on assuming no insulation exists because they don't understand Building Control certificates. Even though they have assumed it doesn't exist it's never one of the things they recommend doing, which seems a bit odd as heat rises.
    We need a complete list of options in no particular order to choose from.

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    I wasn’t going to put the rent up on my properties. But I changed my mind as I thought the tenants are going to benefit from me upping the EPC. So I am saving the extra rent money in a separate account to pay for the improvements. Problem sorted.


    That makes total sense Stephen, have at least some of the money up front


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