New research conducted by specialist savings and lending bank, Shawbrook Bank, has revealed that 15% of landlords lack knowledge about impending energy performance certificate (EPC) rating changes.
The energy efficiency of a property is measured with an EPC. The process involves the energy efficiency of a person’s home receiving a rating between ‘G’ and ‘A’.
A rating of ‘E’ or above is the current pass rate, however, starting from 2025 properties that are newly rented must receive a rating of ‘C’ or above. Tenancies that are already up and running will need to comply by 2028.
In the Shawbrook Bank survey, 25% of landlords surveyed admitted that they have little to no knowledge about the EPC rating changes that are on the way. While landlords who have been renting homes for more than 10 years were identified as the least knowledgeable about the upcoming changes.
Properties most at risk
Although 2025 seems like it is in the distant future, delaying home improvement work to improve EPC ratings could be damaging.
The older the property the more likely it is to include built-in defaults and have an old gas boiler installed, making it less energy-efficient and more expensive to improve.
In total around 36% of landlords have homes that were built before 1940, meaning that many landlords will need to make changes to comply with the new EPC rules.
The research shows that four in 10 landlords own properties in London that were built before 1940. In addition to this Victorian properties are common in London and Bath. According to landlords these total around 13% of private rental housing stock nationally.
Attaining a C grade EPC rating
Attaining a 'C' grade rating is necessary for landlords to protect their homes and ensure that they are compliant with the upcoming changes.
Emma Cox, sales director at Shawbrook Bank, further explains: “The true extent of what this legislation could mean for the market has not yet been properly realised. Inaction could see a considerable percentage of the private rental sector declared unrentable or unsellable within a matter of years if landlords don’t take important steps now.”
“Making changes to improve a property’s energy efficiency rating will help to improve the overall energy efficiency of the UK housing stock and to assist the government in meeting the ambitious net-carbon zero targets set out earlier this year. But on a more direct level, making the improvements ahead of the impending 2025 deadline will ensure that properties remain commercially viable for the short and long term for landlords. Putting off making necessary changes could leave landlords exposed to extended void periods when their property can’t be rented out while works are being completed.”
“Mortgage lenders, and key players in the market, have a big role to play in supporting landlords by helping them to understand the new legislation, the potential impact this could cause and how to take action, if required. Our research indicates a clear gap in landlord’s understanding of how the changes will impact them and their current yields. As well as these risks to landlords, renters may also be put in an even worse position as they compete for a smaller number of properties that are rated C or above after the 2025 deadline.”