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EPC improvements could cost landlords £5.9k on average but less than a third have the funds available

Insulation In Attic
  • Under current proposals, landlords could lose up to £9.5k a year if they are unable to improve EPC ratings and therefore can’t rent out their properties
  • Two in five landlords (42%) claimed their tenants would need to vacate their properties for improvements to be made at a cost of £5k in lost rent
  • 10% of landlords won’t be starting work for up to four years, cutting it close to the proposed 2025 deadline

Landlords could lose up to £9.5k a year if they are unable to make changes to the energy efficiency of their property ahead of the proposed EPC regulation changes and 2025 deadline, according to research from Shawbrook. This figure refers to the average amount landlords estimate they would lose in rental income per year if they were unable to rent out their property.

A whitepaper entitled Confronting the EPC Challenge published by Shawbrook shows 30% of landlords have not yet made any energy efficiency updates to their properties, with most claiming that works will start within the coming 14 months.

Surprisingly, 10% of landlords said they won’t be starting any works for three or four years, cutting it close to the proposed 2025 deadline.

42% admitted that their tenants would need to leave the properties during the improvement works, with 38% expecting their properties to be vacant for four weeks at a cost of £5k in rental income.

Close to a quarter (23%) of landlords said their properties are currently rated D or below for energy efficiency so would face being unable to begin a new tenancy from 2025 unless improvements are made, should the proposed regulations be implemented.

However, 27% of landlords admitted to not knowing the energy efficiency rating of their property. In some cases, landlords said they only knew the current energy efficiency rating for some, not all of their rental properties.

Consequently, a quarter (25%) of landlords don’t know if, or what, level of work will be needed for their properties to meet the minimum ‘C’ rating under current proposals.

The research found that, on average, landlords expect the improvements to cost £5,900, but only 31% currently have the necessary funds available to pay for the proposed changes.

Emma Cox, Managing Director of Real Estate at Shawbrook, commented:

“As a business, we welcome the proposed legislative changes and the opportunity this will provide landlords and members of the private rented sector to be at the forefront of the UK’s green revolution. However, there are many unanswered questions about the deadline and possible incentives to enable improvements to be made, so further clarity and education is needed to support landlords through the changes.

“While our research shows that one in ten landlords are planning to put off starting any work for three to four years in the hope that this will bring further clarity, putting works off for too long could be detrimental financially. For landlords that don’t have access to the necessary funds to make improvements, brokers can play a key role in supporting them. There are cost effective funding options available, such as bridging finance, and brokers are well placed to help make landlords aware of these solutions.”