A bank boss says landlords are facing a crisis of affordability when it comes to meeting strict new energy efficiency targets imposed by government.
The Westminster government has yet to respond to a consultation it held in 2020 on how to boost rental sector energy efficiency, but a draft strategy includes a ‘preferred policy scenario’ for new tenancies to have an EPC rating of C or above by 2025, extending to all tenancies by 2028.
However Mike Feasey, relationship director at the Secure Trust Bank, is warning that landlords and investors are in an increasingly difficult position.
He says: “We’re getting a lot of feedback from private landlords that high costs are proving a barrier when considering the benefits of upgrading their property’s energy efficiency credentials.
“The government is piling on the pressure by proposing that all rented homes should fall into the A-C bracket for new tenancies by 2025 and for all tenancies by 2028, but the cost of upgrading is becoming more expensive by the day.”
Official measures of material costs show a high degree of volatility across all material categories, while private landlords also need to factor in the increase in labour costs for tradesmen to complete any upgrades to their properties.
However, Feasey says doing nothing is not an option., adding: “The clock is ticking, and costs can quickly rise through inaction. The cost of retrofitting existing buildings with green and sustainable measures will, in all likelihood, continue to rise and make it more difficult to recoup the cost of that investment throughout the remaining life of a property.”
With currently over half of the homes in England rated D or below for energy efficiency, he believes there are options for private landlords and investors - residential investment loans for investors to acquire or maintain existing stock, or the release of equity to fund further energy efficient residential projects.
“Doing nothing is not an option because the danger is that landlords and investors will be left with properties that cannot be let and may prove difficult to sell” he concludes.
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First we need to know if EPC C is going to be a requirement.
Then we need to see what the expected changes to the EPC algorithm do for our properties.
Then we need a full list of what each potential improvement would do to our EPC score.
Only then can we determine if it is possible or viable to achieve the required EPC.
Re the list of improvements...I can't get my head around the fact they removed this from the EPCs. Of all the 'improvements' to make, they removed the one useful part. Ridiculous.
Agree
So Feasey says doing nothing is not an option …. BS…. I will be doing exactly that ! Although if you include selling up, I guess I am doing something 😂👍🏻., also let us put a stop to this nonsense of not being able to sell the properties…. To another landlord, probably… but to a FTB’er, utter nonsense, they will lap them up and pay handsomely.
100%
If labour bring in that rent cap at 30% of local wage then I won't be spending any money on my properties they will be sold or sit empty as tenants leave
Here is just one EPC report - indicative costs of minimum £14150 rising to possibly £30650 to save total of £1074 p.a. - so am not exactly gagging to do this.
Not possible for rental properties in listed buildings
Their may be a lot of exemptions.
There us too much uncertainty about this to make any commitment at this stage. Until I'm sure that any proposed measures won't have detrimental side effects, like damp or making the building look hideous, I won't do anything.
I have told my existing tenants that I can’t afford to upgrade the properties that they are renting and that they will have to leave before January 2028. I have pointed out that I am NOT evicting them as I am happy for them to stay. But it is the government that are evicting them. One of them has offered me a brown envelope every month!!!
Talking to a very happy tenant on Friday, electric heating as there is no gas in the area, she has offered to go halves to upgrade to new Dimplex storage heaters should we need to, the lady is 66, loves the bungalow and the area, she wants to live there until she dies
I thought EPC C would force me to sell up but it appears now that a Labour Govt will force me out before 2025 🙁 Why would I spend money on a property where the rent is capped, eviction banned even for rent arrears and the tenant can do what they want with MY property?
They are living in cloud cuckoo land!
Tricia - just had that exact conversation 😂 we are being attacked by all sides 😰😰
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