10:56 AM, 19th April 2023, About 11 months ago 2
The cost for landlords to upgrade their rental properties to meet a minimum EPC rating of C by an expected deadline of 2028 will see two-thirds (59%) sell up and leave the sector.
That’s according to the Mortgage Advice Bureau which says that more clarity regarding the help that is available to landlords is needed.
They also found that the potential upgrade bill will be passed onto tenants, with a third (30%) of landlords saying they would do this.
Another 30% said they had already passed on bills for other upgrades to tenants.
The firm’s deputy chief executive, Ben Thompson, said: “The need for more efficient housing is obvious and has had a lot of focus placed on it in recent months.
“For renters, it means potentially lower utility bills, and for the UK’s climate goals, our leaky housing stock is a big barrier to getting to net-zero.
“However, for landlords, the proposed changes to upgrade to at least a C instead of the current E will mean they face having to foot large retrofitting bills.”
He added: “Our research shows just how confused and worried they are by this.
“Even if (as rumoured recently) the government delay the proposed deadline to 2028 for all rental properties, it isn’t long to find the money needed for the upgrades.”
With many landlords facing a hefty bill and a race against time, a fifth (21%) of landlords are hoping that more help will become available to combat the cost of energy performance upgrades.
Currently, landlords must have a minimum energy efficiency rating of an E to be able to let a property out, with exemptions for those properties which would cost more than £3,500 to retrofit to this level.
It is expected that the government will announce a similar exemption for the new enhanced level, but with the additional cost involved to go from an EPC of E to C.
However, this exemption is due to be set at £10,000, with the average home expected to cost £4,700 to retrofit to meet this.
It is this bill that is leaving many landlords concerned and anxious about how they will afford these changes.
According to the research, a quarter (25%) said it was likely they wouldn’t be able to afford the changes, while a third (34%) said it was quite likely they would sell their property instead of upgrading it.
The newly announced ‘Great British Insulation Scheme’ (formally ECO+) could help improve the performance of the least energy efficient homes.
However, there has been little in the way of policies, announcements, or clarity for landlords, leaving them confused about what upgrades will help.