The energy crisis and a prolonged spell of sub-zero temperatures make the argument for tougher EPC standards in the private rented sector (PRS) even more compelling. Now, as 2023 looms, we are just over two years from a set of radical reforms in the lettings industry, designed specifically to force landlords into eco action. The question is, are landlords ready?
Majority of buy-to-lets fail eco standards
Two new pieces of research indicate that properties in the PRS currently lag behind the Government’s aim for all new and renewing tenancies to possess an EPC of at least a C by April 2025. A study by Shawbrook found 71% of landlords questioned still owned buy-to-lets where the EPC was D or below (the current legal minimum is E). Worryingly, only 25% of investment portfolios contained properties that all met the incoming C target.
The future of privately rented properties is also worrying the people at Propertymark, who analysed data from the latest English Housing Survey to predict how energy efficient PRS stock would be in the future. Although the number of homes with an EPC of C rose in the eight years to 2020, the rise was only 20%. This took the total percentage of buy-to-let homes with an EPC of C to 39%. If the same pattern repeats itself, only 60% of privately rented properties will have an EPC of C come 2028 – the year when the Government wants ALL buy-to-lets to have this rating.
The cost factor
As we wrote about recently, shockingly high mortgage rates are set to reduce landlords’ profits to £7 a year, so the cost of bringing buy-to-lets up to a minimum C EPC rating needs factoring in. It was widely reported that the cost of improving a rental property so it would reach a C standard was in the region of £2,000 but with the price of materials and labour increasing, many landlords will have grossly underestimated this outlay. Sadly, £7 profit won’t stretch very far when it comes to solar panels or heat pumps, for instance.
No shortcut to energy efficiency improvements
Those landlords determined to stick with the PRS are advised to make necessary eco improvements sooner rather than later, given the pressure on parts, materials and trades is only set to intensify. It’s also worth bearing in mind, the lower the EPC rating now, the more work will be needed to reach the legally-required C grade.
For portfolio investors and small-time landlords without the financial reserves or profit margins to make the eco investments required, non-compliance risks huge financial fines and the refusal among letting agents to market the properties.
With the net closing in on energy inefficient rental properties and buy-to-let profits at all-time lows, LandlordBuyer can become part of your ‘next step’ plan. We offer portfolio owners and one-property landlords a fuss-free exit strategy. We purchase buy-to-let properties whatever their EPC rating and we don’t ask for a vacant property either – no need to evict tenants.
LandlordBuyer’ property buying service is ideal for investors who want to sell quickly and cut their losses. If you’re curious about how much we will purchase your buy-to-let for, we’ll give you a free, no-obligation cash offer so you can make an informed decision. Don’t forget, when you sell to us, there are no estate agent, legal or EPC fees to pay – plus we can offer you exchange within seven working days.
If you’re unsure about the EPC status of your buy-to-lets or would like to discuss what it would take to get your property up to the new, incoming C standard, contact the LandlordBuyer team today.