Landlords are not cash cows – but we are caught up in the EPC net

Are there any other landlords who are fed up with the narrative that we are swimming in wealth, ready to splash out thousands on energy performance certificate (EPC) upgrades?

This is a tired trope that needs debunking especially since tenant advocacy groups like Generation Rent claim landlords can ‘easily afford’ the costly upgrades required to meet the government’s ambitious EPC C targets by 2030, with new tenancies facing the deadline as early as 2028.

This assertion assumes landlords are sitting on piles of cash, unburdened by mortgages or the spiralling costs of maintaining rental properties.

The reality is far less rosy, and the government’s pitiful lack of joined up thinking on policies affecting the PRS only tightens the noose around the sector.

Let’s start with the numbers since research from epIMS estimates that upgrading the 2.58 million private rental properties currently below an EPC C rating could cost landlords a staggering £19.8 billion, with an average cost of £8,000 per property.

In London, where 1.2 million rental homes need upgrades, the bill could hit £4.7 billion, with costs averaging £9,000 per property.

For a landlord with a portfolio of eight properties, that’s a potential £64,000 hit over the next five years.

Most landlords aren’t rich

Yet, Generation Rent blithely asserts that because many landlords are mortgage-free (most are not), all of us can foot this bill without blinking.

Tell that to the landlords scraping by on slim margins, juggling maintenance, taxes and selective licensing and now we face the looming threat of ‘death by a thousand clipboard checks’.

The government’s new Reduced Data Standard Assessment Procedure (RdSAP) for EPC assessments has only made matters worse.

Energy assessors will now collect more detailed data, down to the type and condition of windows and the efficiency of heating systems based on model numbers.

While the government claims this will provide a ‘clearer picture’ of a property’s energy efficiency, experts warn it could lead to many homes dropping an EPC band.

Now, for those who don’t quite understand the significance of that, a property that barely scraped a C rating could now be downgraded to a D, rendering it unlettable under the new rules unless landlords cough up for upgrades.

One retrofit company says that changes in how electric heating systems are scored could penalise properties with heat pumps, perversely discouraging green investments.

We are facing an unpalatable issue – landlords who have spent their way to scrape to a C rating from D might well see the property being downgraded back to D.

There’s also the potential of landlords who have invested in heat pumps seeing the EPC rating being downgraded because of the pump’s electric running costs.

Net Zero madness

This isn’t Net Zero progress – it’s a bureaucratic nightmare that punishes landlords for trying to comply.

I’m fully on board now with those landlords who have been telling us to ignore the government’s urgings in recent years and wait until the scoring system is settled.

I can’t even bring myself to discuss the government’s Warm Homes Plan, with its £13.2 billion funding, is touted as a lifeline, but while grants are available, they have strict eligibility limited to tenants on low incomes.

Even then, the maximum investment cap for exemptions is £15,000 – hardly enough for older properties requiring extensive retrofitting.

Leading Labour lights insist that these upgrades won’t lead to rent rises but Labour’s own Justice Minister, Sarah Sackman, let the cat out of the bag when she confirmed that landlords can legally factor EPC costs into ‘higher market rents’.

The Conservatives estimate this could mean rent increases of up to £4,000 a year, a burden tenants can ill afford in a cost-of-living crisis.

The EPC debacle will inevitably see good, blameless tenants being evicted because landlords don’t have tens of thousands of pounds lying around to carry out the work.

The government wants to decarbonise homes – only for the PRS – and yet the EPC system is widely criticised as unfit for purpose.

The Energy Security and Net Zero Committee says that EPCs are ‘devalued’ by landlords and tenants alike, with many ignoring ratings altogether.

Proposals to require new EPCs for every tenancy, even for existing tenants, add yet another layer of cost and complexity. For HMOs, where tenant turnover can be as frequent as every nine months, this could mean a new EPC every time a single room is relet – a logistical and financial disaster.

Landlords aren’t anti-environment. Many are proactively upgrading properties, but the system offers little incentive.

Tory MPs have urged tax breaks to offset costs, arguing that energy-efficient homes could reduce tenants’ bills and reliance on foreign fuel. Yet, the government seems more interested in punitive regulations than practical support.

Being a landlord today

The real-world ignorance of what it takes to be a landlord today is staggering.

Between rising EPC costs, the Renters’ Rights Bill, and the potential abolition of Section 21, 73% of landlords report plummeting confidence.

It’s time to stop painting landlords as cash-rich villains.

We’re navigating a minefield of regulations, rising costs and unrealistic expectations.

If the government wants a greener PRS, it needs to offer real support – tax incentives, streamlined grants and a fairer EPC system – rather than piling on more burdens.

Otherwise, the only thing ‘net zero’ will describe is the number of rental properties left on the market.

Until next time,

The Landlord Crusader