Research from Shawbrook shows how many landlords have spent money preparing for EPC changes which are now not going to happen.
A regulation, scrapped on Thursday, required landlords’ rental properties to adhere to a minimum EPC rating of C by 2025 for new tenancies, and for all rental properties by 2028.
Shawbrook’s study shows that 80 per cent of landlords say they were already prepared for the 2025 EPC regulation deadline.
Of these landlords almost a third said their properties already have an EPC rating of A-C, while half said they had plans in place to improve their EPC rating before 2025.
Meanwhile, 17 per cent said they were not prepared and had no plans to improve the EPC rating of their property.
Just three per cent said they had not heard of the regulation.
Nearly half of landlords have spent between £500 and £20,000 on improving or investing in their property in the last year, with the mean average amount landlords have spent being £25,148.
This average amount rises to £37,164 for London-based landlords.
A fifth said that cost of labour for property improvements was a key concern for their rental properties over the next six months, while 16 per cent said EPC regulations were a concern.
The proposed regulations have also prompted many landlords to be more energy conscious when investing in new property, with over a quarter prioritising buying newer, more energy efficient properties in the next six months.
When asked about previous rumours of the initial EPC regulation deadline moving to 2028, 31 per cent said it would give them more breathing space to complete improvements across their portfolio, while 29 per cent said they will progress with their improvement plans regardless.
Emma Cox, Managing Director of Real Estate at Shawbrook Bank says: “Scrapping the impending EPC regulations might free up capital in the short term for landlords who haven’t yet invested in improving the energy rating of their properties.
“But while policies shift, climate change is going nowhere, and energy efficient buildings will remain central to net zero plans.
“Rules might not be changing as soon as 2025, but professional landlords with modern, energy efficient stock will be in the best position to attract tenants, as well as reduce potential voids, and importantly, be prepared for future legislative change.”
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Emma Cox, another person clearly affected by "CO2 emission zero dementia"! What does she mean when saying landlords with newer properties will be in a better position to attract tenants? Do we landlords with houses of the 19th century have to destroy them and rebuild them for EPC efficiency in the meantime, cancelling buildings of historical value to please Emma's vision?
Labour and the Lib Dem’s have already announced that they will keep with the Conversative’s long term proposal (until last Wednesday) to move to EPC Grade C for the PRS. The Conservative’s Minimum Energy Efficiency Standard has been working extremely well for years and thousands of domestic, commercial and social rental sector landlords have invested to make their units fit-for-purpose.
There will be a Labour/Lib Dem coalition government from May’24 and EPC Grade C will be back on. In the meantime, No UK lending institution will change their current requirement for Grade C for domestic lending and Grade B for commercial lending.
Martin, not one of my remortgages to date have asked for a particular level of EPC grade. Last time I looked, the deals based on EPC C or above were not the best deals available in General so I don't see that as a valid point.
I, like most responsible landlords, brought my portfolio up to the best level possible within a reasonable spend - so loft insulation, cavities insulated where there are cavities, modern double glazing, efficient condensing boilers and TRVs/programmers. However, I have 2 properties which are not economic to bring up to EPC C due to being historically unsuitable. One will be sold and the money used to pay off the borrowing on the one I live in myself.
Martin, you really need to get your head out of your heat pump. Sunak and Gove both rowed back on this because landlords put the for sale signs up. Reduction in stock pushed rents up, a crisis was on the horizon.
Looking at the numbers who did sell or about to sell has caused them to about turn, do you seriously think Labour will cause a housing crisis in their first 100 days in office? No chance...
I bet there WON'T be a Labour government in power in May 2024, and if there is, it won't dare row back on Rishi's most welcome recognition of real life in the PRS. Hopefully there will be further recognition in the coming weeks and months in order to pave the way for another Conservative victory in late 2024.
I am so confident of this that I have around £4 million resting on it!
Thanks you unelected wef clown , 250k down the drain
Climate change is natural occurring, it’s all just another tax raising scam and levelling down not up
As Emily says, there is no minimum requirement for grade C mortgage lending from most lenders. This is just nonsense.
Finally the government has seen the harm they are doing and the sell off in the PRS and rowed back on their proposals. You seem to have a crystal ball Martin. No one can say who or what a future government will do despite what they may say today. If a labour coalition gets in and reinstates EPC C requirement, I hope they have plans for housing the homeless that they will create.
As for D rated properties not being fit for purpose, I live in a 50’s bungalow. It has cavity wall insulation, A rated double glazing, a modern condenser combination boiler, about 2ft of loft insulation and led lighting throughout. Guess what? It’s rated a D and unless I move out of the house, take out the kitchen, rip up the flooring, dig out the concrete and insulate it, it will remain a D. I don’t live in fuel poverty or regard the place as unfit for purpose. In fact it’s nice and warm.
Firstly people that rushed to comply where warned both on this platform and many many other places that landlords should wait and see, because none of these targets had become law.
If you have spent this money, it's not dead money you've made an improvement that with the direction of travel become required eventually, the difference is hopefully by waiting the technology and materials will have improved and be cheaper in real terms like Solar.
The main issue that remains is practicality these politicians live in luxury tax payer funded homes they don't have a clue of what average UK housing stock looks like and that's a problem that continually needs to be pointed out loud and clear to them.
Finally the hypocrisy of New Builds that still don't have Triple Glazing, Solar PV, Heat Pumps and Rain Harvesting as standard - why are we still building problems?
Fully agreed John, no way was I going to spend anything as most of my boilers have been replaced in the last few years and work perfectly well. The amount of sales by landlords also caused me to do nothing as I could see problems down the track for the government and local councils.
Two up two down now being rented for double what it was two years ago... Madness
you are right John the best advice before spending lots of money wait and see.
Phew 😰…. Luckily I did bugg** all 😂😂👍🏻
There are a range of national energy efficiency schemes like ECO4, The Great British Insulation Scheme, and Connected for Warmth that are currently offering support for private rental sector homes. Granted they all have qualifying criteria based on the income level of the tenant and the properties EPC rating, but I urge all landlords to check them out and see what is available. If you have tenants that potentially qualify then supporting them to access the funding could offer improvements worth £000s.
One very cost-effective approach to enhance rental homes' environmental performance is upgrading to smart heating controls. These are the sort of improvements that can be easily implemented with little capital outlay or disruption. For example for less than £300 for the average rental property, Secure Meters offer 2 Radbot 1 the intelligent thermostatic radiator valve and C1727 smart thermostat with remote landlord control functionality, that can reduce heating costs by up to 30% and improve EPC ratings by 6 points. Both measures are eligible for funding under ECO4 and connected for warmth but even without funding they represent the most cost-effective energy efficiency upgrade currently available.
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