HMO landlords accelerate EPC upgrades

HMO landlords preparing for tighter energy performance certificate (EPC) rules are already bringing forward improvements, while many are shielding tenants from rising household bills.

Research from Paragon Bank found that two-thirds of HMOs owned by landlords they surveyed have an EPC rating of between A and C.

Around half of the wider housing stock meets the same standard, according to the government data highlighted in the research.

None of the landlords surveyed reported owning an HMO in the lowest F or G bands.

EPCs for HMOs are crucial

Paragon’s managing director of mortgages, Louisa Sedgwick, said: “Energy efficiency is now a core part of how HMO landlords operate.

“Many are already ahead of proposed standards, which reflects a long-term approach to managing their properties.”

She added: “It is also encouraging to see the steps landlords are taking to support tenants with the cost of living.

“In addition to increasing the value of their portfolios, by investing in more efficient homes and, in many cases, absorbing higher energy costs, they are helping to keep shared housing both sustainable and more affordable.”

Rented homes EPC C

The findings come as landlords prepare for proposed changes to Minimum Energy Efficiency Standards, which are expected to require privately rented properties to achieve an EPC rating of C by 2030.

More than a quarter of respondents (28%) said they had already brought forward energy efficiency work in response to the proposals.

The improvements being carried out were not detailed in the research, but the results indicate that some HMO landlords are acting before the proposed deadline rather than waiting for the final requirements.

Managing HMO energy costs

Household energy costs are also affecting how HMOs are managed.

More than four in 10 landlords surveyed said they were absorbing increased energy bills instead of recovering the additional costs through higher rents.

This is particularly relevant in shared accommodation where energy bills may be included in the rent, leaving landlords directly exposed when gas and electricity costs rise.