Seven in 10 landlords have properties with an EPC rating of D or below 

The scale of the situation for landlords having to improve their rental properties to meet the energy performance certificate (EPC) standard of C has been laid bare in new research.

According to Shawbrook, seven in 10 (71%) landlords in the UK still own rental properties with an EPC rating of D or below.

Their study also reveals that only a quarter of landlords’ portfolios contain properties that all meet the C target for energy efficiency.

Nearly four-in-ten (38%) only have properties that are rated D or below.

Property118.com has previously revealed that most landlords with properties below a C rating will have to spend thousands of pounds to bring them up to standard.

And readers have highlighted that BTL mortgage lenders are increasingly looking at the EPC rating of a property – though there is no legislation that states that properties must meet this standard by 2025, as many believe.

Currently able to let homes which have an EPC rating of D

While landlords are currently able to let homes which have an EPC rating of D and above, standards are widely expected to become tougher.

The government has previously set out an ‘aspiration’ for a minimum C rating in England and Wales by April 2025.

Future legislation could see landlords unable to take on new tenants or face fines if they fail to comply with the changes.

Landlords estimate that bringing the average property up to a C standard would cost them almost £2,000.

However, there is a concern that with the cost of labour and materials going up, landlords could be underestimating the cost of the work.

79% of landlords with a mortgage have at least one property rated D or below

The research shows that 79% of landlords with a mortgage have at least one property rated D or below, indicating a role for lenders in making efficiency improvements.

Shawbrook is continuing to offer EPC-related discounts as part of its commitment to sustainability in the rental sector.

The findings are part of Shawbrook’s second EPC report which explores the current EPC challenge, including the role of the cost-of-living crisis in driving change.

It also investigates the knowledge gap and the role of government and the wider industry to support landlords in improving efficiency.

‘Efficiency standards will become tougher in the future’

Emma Cox, the managing director of real estate at Shawbrook, said: “It’s likely that efficiency standards will become tougher in the future, which is just one of the reasons that landlords should take note of these proposals and start making a plan.

“Landlords should know that they are not alone in this.

“Lenders, including Shawbrook, are working hard to help drive awareness of regulatory change, support with creative product options, and offer practical support to customers and partners.”

Ms Cox added: “Standard products like bridging finance can also play a role in securing the future of the sector.

“During such a challenging period for the UK in general, we remain committed to bringing together all industry stakeholders to develop the conversation around EPCs, and to make real progress towards our shared goals.”