Upgrades to improve energy efficiency of the PRS could cost landlords an average of £11,713 per property, according to Pegasus Insight.
The Renters Rights Act is requiring all PRS landlords to upgrade their properties to a minimum EPC rating of C by 2030.
Pegasus surveyed 631 landlords in the first quarter to find out how much they expect it will cost them to be compliant.
Over half (60%) of landlords own at least one property currently rated below C.
Despite this cost, landlords are pushing ahead with investments to upgrade their portfolios.
Pegasus found that 62% of affected landlords intend to carry out the necessary improvements, up 13% from the previous quarter.
Over two thirds of landlords expect to use savings to cover at least some of the costs and many others are exploring alternative funding options.
Pegasus found that almost one in four landlords hope to access government grants or other support schemes to cover these costs.
Tellingly, separate research from Pegasus found that the EPC rating of a property can help attract tenants to a property.
Nearly half of tenants (44%) that Pegasus spoke to said EPC ratings are an important factor for them when choosing a property.
“Our research found that landlords believe energy efficiency improvements become financially unviable at around £9,000 per property, yet they estimate the cost of achieving EPC C will average almost £12,000 — that leaves a significant funding gap,” said Mark Long, founder and managing director at Pegasus Insight (pictured above).
"Many landlords are actively looking for financial support to bridge that gap, creating a significant opportunity for lenders to help unlock investment across the PRS.
"The most successful solutions are likely to be those that make retrofit funding simple, accessible and commercially viable for landlords."
