2028 EPC deadline could cut rental supply, warns UK Finance

The government should abandon the 2028 deadline for all new tenancies to meet EPC C targets, claims UK Finance.

In response to a government consultation on improving minimum energy efficiency standards in the private rented sector, UK Finance argues the 2028 deadline could have severe consequences for the supply of rental properties.

The government has proposed, but not yet made law, a 2028 deadline for all new tenancies to meet EPC C targets, with a 2030 deadline for all tenancies.

2028 deadline will have severe consequences

In response to the government consultation, UK Finance warns that with the Renters’ Rights Bill abolishing fixed-term tenancies, the 2028 deadline will leave landlords facing big costs and tight deadlines.

UK Finance said: “We have serious concerns that proceeding with the 2028 deadline will have severe consequences for the supply of rentable properties to the private rented sector.

“We are concerned about the number of properties (estimated at almost 3 million properties) that will be impacted in the short window between 2026 (when the government anticipates landlords will begin to carry out work) and the 2028 deadline for new tenancies.

“Given that the Renters’ Rights Bill aims to abolish Assured Shorthold Tenancies (AST) and replace them with periodic ones, the frequency of new tenancies is likely to increase, as will the number of properties caught by the 2028 date. The timescale for transition for ‘new tenancies’ is challenging and overly ambitious, particularly if many properties cannot be improved on time in an economically viable and cost-effective way.

“We therefore recommend abandoning the proposed 2028 deadline for new tenancies.”

Only 55% of mortgaged buy-to-let properties will reach the minimum EPC C rating by 2028

Elsewhere in the consultation, UK Finance recommends more government support for landlords, including raising awareness around EPC changes and helping them find reliable and qualified installers to support the EPC transition.

Their analysis suggests that if landlords continue without this support, only 55% of mortgaged buy-to-let properties will reach the minimum EPC C rating by 2028, rising to 60% by 2030. These figures are based on the current EPC metric.

UK Finance also suggests that without action, EPC C targets won’t be achievable across the mortgaged buy-to-let sector until sometime between 2037 and 2043.

The organisation is also calling on the government to introduce a ten-year exemption for landlords who are unable to meet the EPC C targets, and believes a cost cap of £10,000 is reasonable.

UK Finance say: “Landlords are faced with increased costs from regulation and mortgage financing, which were not present in 2020. It is therefore reasonable that once the landlord has carried out improvements that count towards the cost cap of £10,000, there should be a reasonable exemption period of 10 years.”

UK Finance also urge the government to work with the financial services sector to develop funding solutions, such as blended public-private finance, to help retrofit homes and improve energy and environmental performance.