EPC upgrades could cost landlords £11,713

Landlords expect to spend an average of £11,713 on each property that needs to reach an EPC C rating, leaving many with a bill they already regard as financially unviable.

Research from Pegasus Insight found that 60% of landlords own at least one property rated below EPC C, creating a potentially substantial demand for finance across the private rented sector.

Nearly two-thirds of affected landlords (62%), intend to carry out the necessary improvements.

That figure has risen by 13% since the previous quarter.

EPC has an unviable limit

The firm’s founder and managing director, Mark Long, said: “For many landlords, the question is no longer whether properties need to become more energy efficient, but how those improvements will be funded.

“Most landlords are willing to invest, but the costs involved are substantial.”

He added: “Many landlords are actively looking for financial support to bridge that gap, creating a significant opportunity for lenders to help unlock investment across the PRS.

“The most successful solutions are likely to be those that make retrofit funding simple, accessible and commercially viable for landlords.”

Landlords will use savings

More than two-thirds of landlords expect to use savings to meet at least part of the cost.

Almost one in four hope to obtain government grants or support, while others are considering further avenues, including borrowing or releasing equity.

Landlords also identified dedicated green finance, preferential mortgage rates for energy-efficient homes and simpler access to retrofit funding as measures that would make the work more achievable.

Pegasus Insight found that landlords place the EPC cost threshold at about £9,000 for each property.

That leaves an average gap of more than £2,700 between the expected cost and the amount they consider affordable.

Separate research by the company found that 44% of tenants consider a property’s EPC rating important when choosing a home.