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0:02 AM, 19th September 2023, About 8 months ago 14
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More than 71% of landlords are unlikely to buy a property which has an EPC rating of less than C, according to new data.
The study by Foundation Home Loans and BVA BDRC, reveals the more properties a landlord has within their portfolio, the less likely they are to buy below a C rating.
A staggering 74% of landlords with six to 10 properties say they would not buy a property with an EPC rating between D-G.
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.
Nearly three-quarters of landlords (71%) said they were fully aware of the looming changes to EPC rules while 24% were aware something is changing and just 4% had no awareness of the rule changes.
Just 18% of landlords polled said they didn’t think EPC rating would be a factor in their buying decisions.
In terms of the work landlords intended to carry out on below level C properties, 37% said they would carry out the works at the minimum cost required to comply, while nearly one in five (20%) said they would carry out works to maximise the long-term value of their property.
However, a quarter said they would not carry out any works and would either sell the property or not re-let it.
Landlords anticipate it will cost just over £10k per property to carry out the works required to reach EPC level C, with this rising to over £11.5k for those with larger portfolio sizes.
According to the survey, more than half of landlords (57%) said they would fund the works via savings, 33% said they would increase the rent and 18% would access government grants or funding.
A further 19% said they would either take a further advance from their lender or take out a loan (down from 20%).
Grant Hendry, director of sales at Foundation Home Loans, said: “While we still might be waiting for certainty and clarity over when the government is likely to introduce its minimum EPC level legislation for the private rental sector, it’s clear from this research that landlords are aware of what is likely to be coming.
“Landlords are thinking seriously about their existing portfolios, how they might fund improvements, and what their plans might be when this is introduced.”
Mr Hendry said it’s not suprising that landlords want to buy properties with higher EPC ratings.
“With landlords anticipating a cost of over £10k per property in order to improve its EPC level to C, it is perhaps not surprising they are disinclined to buy properties already below this. In effect, they are future-proofing their portfolios by opting only to buy C and above properties now, while they will presumably focus on those properties within their portfolio which are not currently at this level.
“It remains somewhat surprising that the majority of landlords are saying they will fund the work via savings, and we wonder whether when push comes to shove, they will really want to do this or they will seek instead to use finance.”
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Teessider
22:33 PM, 19th September 2023, About 8 months ago
From the Beeb,
Third, homeowners and landlords would be told that there will be no new energy efficiency regulations on homes. Ministers had been considering imposing fines on landlords who fail to upgrade their properties to a certain level of energy efficiency.
Neil Robb
7:53 AM, 20th September 2023, About 8 months ago
Even buying at a rating of C is no guarantee. In Scotland the housing minister is going to down grade any property with gas or oil boiler so they won't be a C any longer.
The EPC rating is so flawed .
Why are they focusing on landlords. In Scotland I think it is 10% . If they really wanted change do every property.
It will be the same as smoke and heat alarms . Private landlords had to do them first. Then when so ial housing council had to do them they changed it to the cheaper option of WiFi connected ones.
Apart from all the talk of change is the exemption rule if you had to spend over £3500 you could apply for it .
New proposal is you will spend £10 k plus vat then apply for exemption.
I bet when it then goes to home owners and housing associations it will be changed
Kate Wood
8:54 AM, 20th September 2023, About 8 months ago
I'm watching and waiting to see how all this lands. If they push on with the minimum C rating with a £10,000 per property spend before an exemption is granted, that's us out of the rental market and several tenants looking for a new home. And I'm not just sounding off. All our properties are a D rating and in the North so the rents aren't all that high. In any case, we're mortgage free so take the long view and would rather have good long term tenants on lower rents than always try for the maximum we could get. So, from a purely business point of view it makes zero sense for us to spend close to £100,000 to save each tenant about £120 per annum. We'll sell up. Even if the market is slow it makes better financial sense to have the properties empty and wait for half decent offers. We can live off the money we would've been spending on the EPCs then reinvest the sale proceeds. We're about to retire so need to think about enjoying life after decades of hard work. Being constantly threatened with fines or worse is the last thing we need. But I feel for the tenants. What the government is doing to these people is wicked.
Reluctant Landlord
9:05 AM, 20th September 2023, About 8 months ago
Reply to the comment left by Kate Wood at 20/09/2023 - 08:54
ditto. I will do the same. Evict tenants on the basis of selling up then just leave the property empty. If the RRB comes in that means we wont fall foul of that either as we wont be renting again within 3 months (or whatever they define)
If everyone else does the same at roughly the same time then this will send a message in itself. Therein the rental supply will automatically drop too....as noone is moving into that empty property.
Kate Wood
9:11 AM, 20th September 2023, About 8 months ago
Reply to the comment left by Reluctant Landlord at 20/09/2023 - 09:05
Watch out for new emergency laws being rushed through. Any previously rented property now empty can be seized by the local council to get people off the streets. Pre Covid a suggestion like that would've been a joke. Now, I'm not so sure.
Reluctant Landlord
9:17 AM, 20th September 2023, About 8 months ago
Reply to the comment left by Kate Wood at 20/09/2023 - 09:11
nope wont happen. Worse case I move a non paying house sitter in....
Kate Wood
9:21 AM, 20th September 2023, About 8 months ago
Reply to the comment left by Reluctant Landlord at 20/09/2023 - 09:17
Good thinking. I'll keep that in mind, just in case....
Old Mrs Landlord
9:45 AM, 20th September 2023, About 8 months ago
I am surprised to see no mention yet on here of reports of Rishii Sunak's change of policy yesterday proposing that landlords will not now be required to ensure rental properties reach a certain EPC level. All the media attention seems to have been focused on the withdrawal of the proposed 2035 ban on new ICE vehicles and postponement of the ban on new gas boilers which form part of the same policy revision. The prospect of an approaching general election seems to have focused politicians' minds on voter resistance to the impact of net zero policies to the extent that damage limitation appears to have begun. The by-election backlash against Khan's ULEZ extension has prompted a rethink and no doubt recent media items highlighting rising rents and the imbalance of supply and demand in the PRS have also played a part.
Reluctant Landlord
10:25 AM, 20th September 2023, About 8 months ago
Reply to the comment left by Kate Wood at 20/09/2023 - 09:21
all it needs is a different persons name on the council tax bill. Could be anyone.
Teessider
10:38 AM, 20th September 2023, About 8 months ago
Give the tenants better security of tenure (by increasing the notice period to much, much longer than 2 months) and give tenants an incentive to improve THEIR homes.