Landlords with some of the country’s largest portfolios say they expect to pay £500,000 or more in the next year on upgrading to meet new EPC standards.
The new Handelsbanken Professional Landlords Survey shows that 56 per cent of the largest-portfolio landlords are planning to invest £100,000 or more, and all property business owners surveyed plan to invest at least £1,000.
Some 92 per cent of the respondents expect the value of their portfolios to increase by at least five per cent over the next 12 months.
And more than two fifths admit they were only moderately familiar with the government’s plan to increase minimum EPC standards to B by 2030.
The survey is based on nationwide research among professional investors with an average of 29 properties worth circa £14m.
For privately rented homes in England and Wales, the government consulted on raising MEES to EPC C, applying to new tenancies from 2025 and to all tenancies from 2028.
It also suggested lifting the cap on landlords’ maximum spend from £3,500 to £10,000, based on the assumption that landlords will spend £4,700 per property to reach a C rating.
However, Energy Security and Net Zero Minister, Graham Stuart signalled recently that a final decision on these proposals would not come this year.
Richard Winder, Head of Sustainability at Handelsbanken, says: “Rolled up across a portfolio, these are not insignificant amounts, and for many investors represent a major step-up in capital expenditure.
“Beyond these MEES requirements, there are growing expectations on both landlords and tenants to take action on climate change and nature, and these are beginning to affect the economics of the rental market.”
Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions.
If any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals, then the post may be deleted and the individual immediately banned from posting in future.
Please help us by reporting comments you consider to be unduly offensive so we can review and take action if necessary. Thank you.
Tenant-400x310.png)
.jpg)
.png)
Join the conversation
Jump to latest comment and add your reply
Ok it says Portfolio landlords with 29 properties worth £14m. I don’t know who those minorities are and it might be insignificant to them or it might not be but I’m sure Richard will know he didn’t say how much equity they have in there or up to their eyes in debt, following all the recent Regulatory requirements and endless costs added.
Great research from Handelsbanken.
Sounds like the Minimum Energy Efficiency Standard (MEES) is continuing to work extremely well. Landlords, both large and small, are making sensible investments to make their assets long-term future proof. Thanks to MEES and thousands of landlords making their buildings better, not a single very energy wasteful domestic or commercial rental has been lawfully leased to a new tenant since 2018.
MEES is a Conservative flag-ship policy and over the last 8 years it has helped thousands out of fuel poverty and has kept the UK's 1 million commercial buildings moving towards reduced CO2 pollution.
Only a complete fool would own & occupy an energy wasteful home and for years and years it has been clear that owning energy wasteful domestic rentals makes no financial sense to a long-term investor. A pat on the back for the Conservative government.
Martin come back to us 😂 You had a period where you were lucid…….
Jonny Five's Alive..!
I suspect that Landlords of older properties with expensive upgrades needed will sell those properties rather than attempt to upgrade them and replace them with fewer more modern properties. This of course will mean that there will be fewer rental properties available, which in turn will only increase the rents for those properties that are available. And as for being able to get single skinned 150 year old properties up to an EPC of b or above by 2030, well good luck with that.and your air source heat pumps.
I find the figures surprising. Do big landlords really own so many expensive properties with poor EPCs?
I own 16 rental properties and most of them are EPC C or above.
Of the others one just needs a new night storage heater to get to C, so less than £1500.
Another one used to be D but currently shows as E (assessor deliberately downgraded it for insulation scheme). In reality it is certainly at least a very high D and probably already a C.
Two more are flats so have more limited options. I was most disappointed when I was cold called last week by the Eco 4 people and told that flats are excluded from their freebie upgrades. I very rarely have qualifying tenants but currently have one in a flat that could do with a gas central heating system. Both flats are likely to be exempt as any further upgrades such as cavity wall or external insulation would require freeholder consent and the agreement of other leaseholders.
Mine will all be sold if this comes in at a C, no question.
I will do what I can to reach C with my properties but WILL NOT do wall insulation internal or external.
"the government’s plan to increase minimum EPC standards to B by 2030."
You what??
I had an EPC ‘C’ for 10 years on renewal the Assessor wouldn’t count the Cavity Wall Insulation and gave it a D, as I don’t have the Certificate although it was as counted last time.
It’s definitely done and was done by the Government Scheme is that not evidence or do they not know what they done, CIGA have 6m records but not mine. The reason I haven’t got it is they insist on sending it to the Property not to the owner, still they have the same stupid nonsense policy today as I found out when I tried to get a replacement document. Tenants invariably don’t pass on letters to their landlords.
It must be more difficult to get a ‘C’ in London on the basis of what you say on here.
It’s a big struggle to get a C and some Roundtree Estates adding 200mm thick Insulation to the outside of existing cavity walls surfaces which also required redoing all windows to facilitate the extra width of wall, then extending roof over hang, Facias, guttering etc.
I kid you not so you need to think again my friends if you thought you knew.
Anyway it’s my understanding you can’t have better than a C without alternative energy source / heat pump / Solar Panels or other…
Please login to comment