Landlords cancel EPC plans after government U-turn

The UK government’s decision to scrap its plans to require energy performance certificates (EPC) for rental properties to have at least a C rating has led to a significant drop in landlords’ investment in energy efficiency measures, a new report reveals.

According to the Lloyds Banking Group, its Housing Stocktake 2023 report shares insights on the stalling efforts to decarbonise the UK’s housing stock, which accounts for 16% of the UK’s total carbon emissions.

The findings back up a report last week from Landbay which showed that 74% of landlords welcomed the EPC rethink – with many not interested in upgrading because there is no legal requirement to do so.

And a study from Foundation Home Loans revealed that a majority of landlords were optimistic about the future of the PRS after the government scrapped EPC requirements.

Landlords had either considered or had taken action

Now a report from Lloyds has found that more than eight in 10 (84%) landlords had either considered or had taken action to improve the energy efficiency of their properties in the last five years, including installing battery storage, solar panels or heat pumps. This was compared with just over a quarter (27%) of homeowners.

However, since the government’s U-turn on its EPC C plans, 42% of landlords have now cancelled plans to invest in energy efficiency measures.

And 53% of UK landlords say they are less likely to invest in energy efficient changes in the future.

The report also reveals that while nearly 57% homeowners think it’s important to make their property ‘net zero ready’ by 2035, more than two-thirds (69%) have not taken any action to make improvements in the last five years.

The main barrier for homeowners is cost, with just one in five (20%) homeowners able to pay for the steps needed to ensure their home is ‘net zero ready’.

Landlords and homeowners need more support

The Lloyds report suggests that both landlords and homeowners need more support from their bank or mortgage provider to get their home net-zero ready.

Seven in 10 (68%) homeowners and nine in 10 (87%) landlords want some form of support from their bank or mortgage provider, such as green mortgages, loans, grants or advice.

The report also shows that landlords demonstrate a much greater awareness of the ways to improve the energy efficiency of their rental properties than homeowners.

Rebecca Heaton, the director of environmental sustainability at Lloyds, said: “As the UK’s largest mortgage lender, we are concerned by the inadequate progress in decarbonising the UK’s 28 million homes.

“The UK has the oldest and draughtiest housing stock in Europe and progress is off track. The lack of progress in decarbonising our homes risks pushing critical net zero goals – and keeping global warming within the 1.5⁰C threshold – further out of reach.”

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