Landlord EPC ignorance “may hamper government energy goals”

Landlord ignorance about EPCs and upcoming rule changes may hamper government efforts to improve energy efficiency in the private rental sector.

So says lender The Mortgage Works in its latest buy to let report.

According to poll of 1,000 UK landlords nearly two thirds (62%) are unaware that having an EPC is a legal requirement. 

When it comes to energy efficiency requirements by 2030, only one in three (33%) knew it was a C rating. 

Nearly three quarters (73%) of landlords also don’t know the proposed dates when the new regulation comes into force. 

The Mortgage Works claims this indicates landlords would value help in understanding new regulations and how to finance the changes in a cost-effective way. 

More than half (55%) said that having help to identify the most cost-effective improvements for their property would be valuable, while 53% say they  would benefit from help to understand the new energy efficiency requirements. 

Half (50%) would benefit from signposting to grants and financing options to pay for the improvements needed. 

While 45 per cent of landlords with a property rated D or lower aim to bring some or all of their properties up to an EPC-C rating by the government’s deadline, more than a quarter of all landlords (28%) plan to sell. 

More than half (54%) of those looking to improve their property are waiting until the end of the government consultation or when the minimum energy efficiency requirements become law before taking action. It’s likely mass inaction will exacerbate the reliance on trades and materials should government force a short implementation period. 

Nearly two thirds of landlords are unsure of how much money they’ll need to spend to bring their properties up to an EPC-C rating. A fifth believe they will need to spend up to £6,632 on average, depending on the property’s current value. 

Paying for any works are likely to have a financial impact on tenants with over a third indicating they will need to raise rents to cover the cost, either before the work is complete, or when it is started. 

However, landlords are also willing to fund works with money they have in their current accounts and savings (38%), while 17 per cent would apply for a further advance. 

The Mortgage Works wants three areas to be addressed:

• More time factored in between completion of EPC reform and new Minimum Energy Efficiency Standards regulations coming into force;

• A phased implementation which tackles the least energy efficient properties first and allows capacity in the retrofit sector to build over time. The initial requirement should be for EPC E properties to be upgraded to EPC D by 2030. Requirements could then shift to EPC D properties with the aim of all rental homes meeting the EPC C target by 2033 or beyond;

• Opposition to a single national cost cap setting the maximum amount landlords are required to spend on improvements. £15,000 is too high and the cap should be reconsidered and replaced with an approach which recognises the complexity of the diverse nature of the UK housing stock and owners’ circumstances.  

Read The Mortgage Works’ full report here. 

This article is taken from Landlord Today