The EPC requirement has been scrapped by Rishi Sunak
news | 4 months ago | Elliot Topham

Industry experts welcome Sunak’s scrapped minimum EPC targets, but fear this is simply a delay

Prime minister Rishi Sunak has ditched the EPC requirements for landlords among the new scale back on the Conservatives green policies.


Under revised plans, the government will scrap policies to force landlords to upgrade the energy efficiency of their properties, while continuing to encourage households to do so “where they can”.

Sunak has described the decision to revise its environmental plans as a “pragmatic” and “realistic” approach to reaching its net zero target by 2050.

In July, secretary of state for levelling up, housing and communities Michael Gove hinted at relaxing the timetable for EPC requirements.

At the time, the proposed deadlines required all existing PRS properties to have a minimum EPC rating of C by 2028, while all new tenancies would need it by 2025.

In a Downing Street press conference on 20th September, Sunak stated: “Under current plans, some property owners would have been forced to make expensive upgrades in just two years’ time.

“Even if you’re only renting, you’ll more than likely see some of that passed on in higher rents . . . so those plans will be scrapped.”

Industry professionals have reacted to the news.

Riz Malik, director at R3 Mortgages, said: “The recent abolition of the EPC requirement has come as a relief to many landlords who are facing financial difficulties.

“Many landlords I've spoken with had put off dealing with this because they were dubious if it would be implemented, and it turns out that they were correct.

“Those that spent money to fulfil the criteria, on the other hand, may be disappointed — if it had gone through when the market was still down, it would have disproportionately impacted tenants as landlords recovered their outlay.”

Emma Cox, managing director of real estate at Shawbrook Bank, also gave her take: “Scrapping the impending EPC regulations might free up capital in the short term for landlords who haven’t yet invested in improving the energy rating of their properties.

“But while policies shift, climate change is going nowhere, and energy-efficient buildings will remain central to net zero plans.

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“The rules might not be changing as soon as 2025, but professional landlords with modern, energy-efficient stock will be in the best position to attract tenants, as well as reduce potential voids and, importantly, be prepared for future legislative change.”

Richard Rowntree, managing director of mortgages at Paragon, added: “We have been telling government for some time that the proposed 2025 and 2028 implementation dates for EPC C were unworkable and unrealistic.

“What we need now is a cohesive and coherent long-term plan that brings industry together to create the platform for the continued improvement of rented homes, considering the needs of all stakeholders.

“With the right infrastructure in place, including resources and skills, I am confident landlords support the decarbonisation of housing stock, helping the UK to hit its 2050 net zero commitments.”

Steve Cox, chief commercial officer at Fleet Mortgages, stated: “There’s some conjecture on this topic, but our view is that this is not a scrapping of the minimum EPC levels for property within the private rental sector, but a delay.

“If that is the case, then setting a more realistic timeline — particularly in a sector which needs all the supply it can get given the demand for property from tenants — seems fair, rather than operating a cliff-edge.

“Our best guess is that, at some point in the future, landlords will still need to get their properties up to EPC C and above, and the timeline for that will become clearer after the general election.

“Again, we are working off the basis that this is not a scrapping, and that landlords should still use the time available to assess what work might be needed on those properties to improve energy-efficiency.

“After all, measures to become more ‘green’ are in the best interests of all stakeholders, not least tenants who should benefit from lower energy bills.”

Ben Beadle, CEO at the NRLA, added: "The NRLA wants to see all properties as energy efficient as possible, however, the uncertainty surrounding energy efficiency policy has been hugely damaging to the supply of rented homes.

"Landlords are struggling to make investment decisions without a clear idea of the government's direction of travel.

“It is welcome that landlords will not be required to invest substantial sums of money during a cost of living crisis when many are themselves struggling financially.

“However, ministers need to use the space they are creating to develop a full plan that supports the rental market to make the energy-efficiency improvements we all want to see.

"This must include appropriate financial support and reform of the tax system which currently fails to support investment in energy-efficiency measures.

 

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