A Paragon Bank study of over 1,200 landlords has found that 15% had purchased property with an EPC rating between A and C in anticipation of the tougher requirements, with a further 10% acquiring D-rated property with a view to upgrading.
Under government proposals new rental tenancies will require a minimum EPC C rating by April 2025, with all tenancies meeting the same standard by 2028.
Despite this the secretary of state for levelling up, housing and communities has recently hinted that the timetable could be ‘relaxed’.
According to Paragon, the research has highlighted that the proposals are influencing landlords’ business strategies more broadly, with just under six in 10 (59%) having taken some form of action as a result.
In addition to acquiring an EPC A to C property, one in five (19%) landlords have already made improvements to bring a property’s EPC rating up to C or above — 14% indicated that they are currently in the process of retrofitting their properties with energy-saving measures in order to meet or exceed standards.
Around one in 10 (9%) landlords said they had sold property that would be too expensive to upgrade and 7% were selling homes unable to reach the target.
Landlords were also asked how EPC ratings would influence future property purchase decisions with six in 10 (61%) saying they would target properties that fall into EPC bands A to C, while 18% would purchase EPC D or E properties with the intention of upgrading them.
A further 2% said they would purchase properties rated EPC F and G while the remaining 19% said that EPC ratings would not impact their future decision making.
Louisa Sedgwick, commercial director at Paragon, said: “Michael Gove’s recent comments mean it’s looking increasingly likely that any new PRS energy efficiency standards will be delayed.
“Nevertheless, it’s encouraging to see landlords are already building on the progress made over the last decade in making privately rented homes more sustainable.
“This has been through buying homes that already meet the new standards proposed by the government, incentivised by green mortgage products.
“But with a significant proportion of landlords already making upgrades to improve the energy efficiency of the properties they already own — or planning to do so in future — we see a need for financial support as well as education on what can be a complex and costly undertaking, something that presents huge opportunities for the sector.”
