Landlords face hefty bill for EPC upgrades

Landlords face a £30 billion bill to upgrade their properties to an EPC rating of C, according to new research.

Letting agents Savills reveal 2.9 million homes in the PRS need upgrading to meet proposed regulations to bring all properties to EPC C.

Though the plans have not been made into law, ministers have previously proposed that by April 2025, newly rented properties in England and Wales will need to meet a minimum EPC standard of C – tougher than the current E standard.

The regulation is also slated to apply to existing tenancies from 2028.

Landlords struggle to cover their costs

The bulk of the problem remains with older housing stock as more than two-thirds (71%) of homes built before 1950 were given an EPC below C in 2021-22, while just 12% of property built post-1995 need improvements.

Savills analysis of EPC recommendations reveals that the cost of fully upgrading properties to a maximum EPC C ranges from £8,807 (EPC D) to £27,366 (EPC G)

Lucian Cook, Savills head of residential research says: “This analysis underscores the enormity of the challenge facing the private rented sector at a time when many landlords struggle to cover their costs.”

Energy-efficiency targets could be delayed

Michael Gove recently announced that energy-efficiency targets for the PRS could be delayed due to financial pressures for landlords.

Mr Cook says the delay will reduce some of the burden for landlords but many still face challenges.

“If the programme to introduce these changes is pushed back, it will reduce some of the immediate financial pressure on landlords and give them more time to plan works effectively.

“However, current mortgage costs and the end of assured shorthold tenancies are still likely to cause some buy to let investors to re-evaluate their position, constraining supply and adding to upward pressure on rents.”