More than half of all homes in the private rented sector need upgrading to achieve an EPC band C by 2028, with landlords facing a total estimated bill of £30 billion at a time when many are struggling to cover their costs.
About 2.9 million properties are affected, with costs for upgrades ranging from £8,807 per property (EPC D) to £27,366 (EPC G), according to new analysis from Savills.
The bulk of the problem remains with older housing stock as more than two-thirds (71%) of homes built before 1950 were given an EPC below C in 2021-22, while just 12% of property built post-1995 need improvements.
Landlords’ costs could be capped at £25 billion if the government were to impose a limit of £10,000 per property, as has been proposed.
However, the government has appeared to acknowledge its targets are too ambitious as earlier this week Housing Secretary Michael Gove suggested a delay in bringing in energy efficiency plans for the PRS. Citing financial pressures on landlords, he told The Telegraph that the government should relax the pace of changes to EPC targets.
Challenging
Lucian Cook (pictured), Savills’ head of residential research, says funding these works will be challenging. While low-cost options such as low energy lighting and installing heating thermostats have been fairly widely adopted, the cost of big-ticket items, such as solar PV and heating, solid wall and solid floor insulation remain significant barriers to further improvement for many.
“If the programme to introduce these changes is pushed back, it will reduce some of the immediate financial pressure on landlords and give them more time to plan works effectively,” he adds.
“However, current mortgage costs and the end of assured shorthold tenancies are still likely to cause some buy-to-let investors to re-evaluate their position, constraining supply and adding to upward pressure on rents.”
LandlordZONE editor Nigel Lewis recently found out the cost of upgrading his property to a ‘C’ from a weak ‘D’.
