Welsh MPs warn EPC C targets could push up rents as landlords face upgrade costs

Welsh MPs have warned EPC C targets could put further pressure on landlords, with concerns that the cost of energy-efficiency upgrades could be passed on to tenants through higher rents.

The government has announced that all private rented homes in England and Wales will need to meet EPC C targets by 2030.

However, there are concerns over how much energy-efficiency improvements will cost landlords.

EPC costs passed on through higher rents

Plaid Cymru MP Leticia Gonzalez asked the Welsh government: “Policies, such as the Warm Homes programme, include the mandatory move towards energy performance certificate C requirements for all private rented homes by 2030.

“This will inevitably add further cost pressures on landlords, costs that tenants are already worried will simply be passed on through higher rents.

“This is compounded by the reduction in the cost cap available to landlords to carry out necessary upgrades, raising serious questions about how deliverable these standards are in practice within the Welsh private rented sector.

“Given this, will the Welsh government work with the UK Government to urgently seek clarity on how landlords are realistically expected to fund and deliver these improvements without further driving up rents for tenants in Wales?”

Recognise concern about the costs for landlords

In response, Local Government, Housing and Planning Secretary Siân Gwenllian said she had spoken with her UK counterpart and that the Welsh government wanted to support landlords by providing advice on cost-effective and appropriate measures to meet the requirements.

She said: “I do recognise the concern about the costs for landlords, and for tenants if those costs are passed on through rent. Ultimately, improving energy efficiency is vital to reduce energy Bills and to tackle fuel poverty, but it has to be practicable.

“I did meet last week the Minister for energy users in the UK Government, and I explained to him that we support attainment of the EPC C target by 2030.

“I did make it clear also that a number of landlords in Wales are not professional landlords and that I’d want to support them to understand their obligations under the new standard.”

Cost not worth the hassle

The National Residential Landlords Association (NRLA) have previously told Property118 that many landlords will decide the cost of retrofitting is not worth the hassle and choose to sell up.

Chris Norris, chief policy officer for the NRLA, said: “We are firmly of the view that rental properties must be as energy efficient as practicable. However, it is simply not feasible for every property in the market to be retrofitted to meet an EPC ‘C’ rating within the previously proposed time frame.

“The current proposal doesn’t take into account the varying age and condition of housing stock inside and outside of the PRS, the complexity of the work required, or the lack of appropriately skilled tradespeople needed to make improvements.

“Many landlords will therefore have little choice but to sell properties that will be difficult, and excessively costly, to retrofit. This will reduce the supply of available rental properties further reducing available housing during the ongoing, and acute, supply and demand crisis.

“Ministers need to develop a targeted programme of support to facilitate investment, as the Committee on Fuel Poverty and Citizens Advice has previously recommended.”