A leading lender believes the government’s likely decision to row back on EPCs is linked to fears that it will hit an already struggling PRS.
Earlier this week, Housing Secretary Michael Gove suggested a delay in bringing in energy efficiency plans – for rental properties to gain an EPC grade C by 2028 – citing financial pressures on landlords.
Shawbrook Bank’s MD of real estate, Emma Cox (main picture), says the rumoured plans to push back this deadline are reflective of the wider economic challenges facing the rented sector, with the government needing to balance the transition to a low carbon economy with protecting socio-economic groups most directly impacted.
“Tenants are facing rising rents and landlords themselves are adapting to a series of tax and regulatory changes over the last few years alongside rising mortgage rates,” says Cox.
Great strides
“While the property sector has been making great strides towards EPC requirements, our research shows that only a quarter of landlords’ portfolios contain properties that all meet the EPC C target.”
Nearly four-in-ten (38%) have properties that are all rated D or below, rising to 58% of investors in London. Some 71% of all landlords still own at least one property in this category, says Shawbrook.
While the proposed timeline could be pushed back, these changes are still coming, adds Cox.
“Acting sooner rather than later can ensure that landlords make the necessary investments to their portfolio and could help to spread that cost over a longer period.
“The lending industry will need to continue to step up with innovative solutions to fund EPC improvements. Landlords themselves could create competitive advantage as energy bills continue to add significant pressure on incomes.”
