NRLA warns that landlords can’t afford EPC upgrades

Landlords can’t afford to pay for the proposed EPC rental property upgrades because they don’t earn enough in rent, the National Residential Landlords Association warns.

It says that the government’s proposed funding model risks collapsing before it even begins.

Ministers want landlords to spend up to £15,000 per property to meet the minimum EPC rating of C standards by 2028 for new tenancies, and by 2030 for all tenancies.

But NRLA research reveals that once energy improvement spending passes £7,700, the numbers for the average landlord to make a profit no longer add up.

EPC work not happening

The organisation’s chief executive, Ben Beadle, said: “We want all rental properties to be as energy efficient as possible.

“However, this isn’t going to happen without a serious plan to support the investments needed.

“Relying on the misguided belief that every landlord has limitless reserves to fall back on is not only wrong but will not get tenants any closer to seeing their homes made energy efficient.”

He added: “If the government is serious about its plans, it needs to engage with the sector now to develop a clear, bespoke package to help responsible landlords invest in energy efficiency works.

“That needs to start by fixing a broken tax system which does nothing to encourage proactive property improvements.”

EPC funding cut

The warning follows the Autumn Budget that trimmed overall energy efficiency funding by 25% across this Parliament, a cut highlighted by the think tank E3G.

The NRLA says ministers cannot continue operating on the mistaken belief that landlords form a wealthy, uniform group able to absorb major upgrade costs.

HMRC figures show unincorporated landlords report an average annual rental income of £19,400, which is far below the full-time minimum wage.

Help the PRS deliver

The NRLA says that the recent Budget offered nothing tailored to help the PRS deliver the government’s energy goals.

That’s despite the Committee on Fuel Poverty urging ministers to introduce tax measures to support the required investment.

With landlords waiting for clarity on the final proposals, the NRLA wants all energy efficiency spending to be fully deductible for income tax.

It is also pushing for the proposed investment cap to reflect property values, warning that a single national limit would hit cheaper areas hardest and deepen the divide between northern and southern regions.