The government has decreed that all rentals have an EPC rating of at least ‘C’ by the end of 2028
Just over half (52%) of landlords with properties that need investment to align their energy efficiency ratings with incoming regulations have considered selling, a report from The Mortgage Works (TMW) shows.
The government has decreed that all rentals have an Energy Performance Certificate (EPC) rating of at least ‘C’ by the end of 2028.
Of the 621 landlords asked by Nationwide’s buy-to-let (BTL) arm, nearly two-thirds have properties that will require improvements.
The more properties a landlord has, the more likely they are to be thinking about selling. TMW found that 63% of respondents with 20 or more properties have considered this, 58% of those with between six and 10 properties, and 35% of individual landlords.
And a sizeable number of landlords, 33%, don’t know what improvements they need to make to meet new regulations.
Of those who do know, 37% said they needed to fit traditional insulation and 25% cited boiler upgrades.
These figures, TMW says, naturally rise with the more properties a landlord has: Some 59% of those with 20 or more properties say they’ll need to fit traditional insulation, while more than a third (37%) will need a boiler upgrade, the report states.
TMW also found that landlords, on average, do not have a considerable amount of money set aside for unexpected costs.
The average amount an individual landlord has saved up comes to £6,599 while those with four to five properties have, on average, just short of £15,000.
Landlords with 20 or more properties have an emergency fund of £35,202.
TMW head of lending Daniel Clinton says: With currently less than four years before all new tenancies need to be in properties rated EPC C or above, there are still landlords who need to undertake remedial work on at least one of their properties. They are therefore understandably concerned about how they will both fund the work, find someone to do it and have it completed in time.
The side effect of these concerns is that a significant number of landlords admit they are ready to give up and already considering selling properties, he said.
He said: An unintended consequence of this sentiment could result in a backwards step in meeting the government’s target around climate change, for example, if these properties are taken up by the owner occupier market, where there are currently no minimum energy efficiency requirements.
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