High number of BTL landlords still unaware of the upcoming changes to EPC regulations

More than two fifths of UK landlords are still not familiar with planned changes to EPC regulations, according to new research from Market Financial Solutions (MFS).

From April 2025, any newly let property in the private rental sector will require an energy performance certificate of C or higher, up from E currently.

The specialist lender commissioned an independent survey among 459 UK landlords who own one or more rental properties. It found that 42% are unaware that the rules around EPC ratings are changing.

Just 57% of landlords with a single buy-to-let property know about the new regulations, although this increases to 77% among those with four or more BTL properties.

Just 38% of landlords fully understand what the change in rules will entail.

The study found that there is support for the changes, with 56% of landlords stating that the sustainability of their properties is important to them irrespective of changing EPC regulations, and 48% feel the government is right to take action to improve the energy efficiency of rental properties.

But a government consultation found that less than 3% of landlords believe that the EPC rating system was fit for purpose, and MFS’s study showed that 65% want more support to help them adapt to the new regulations.

MFS’s research showed that 64% are unsure of how they would make their properties more efficient.

Just over half – 52% – would consider raising rent to pay for any renovations their property would need.

In the past year, 15% have spoken to a broker or lender about securing finance to improve their properties’ energy efficiency. Some 33% are considering selling their BTL properties before 2025 due to concerns over how they would finance the necessary renovations.

Paresh Raja, CEO of MFS, said: “Despite there being support for making the property market greener, there remains a worrying lack of awareness among landlords about the upcoming changes to EPC regulations, not to mention how they can make the necessary renovations. With the deadline for the new regulations just over two years away, it’s clear more support is needed.

“Lenders can help. By working with brokers and property investors, lenders can ensure more landlords know what the new rules entail. But they can also provide flexible financial products, which will likely prove important – in the current climate, many landlords will not have the capital available to make the changes their properties need, so flexible loans could be crucial in allowing landlords to keep pace with a quickly changing regulatory landscape.”

 

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6 Comments

  1. E8PS

    Is this actually confirmed yet I was under the impression it was still going through parliament ?

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  2. jeremy1960

    This completely useless, ineffective government hasn’t a clue about what it’s doing or wants. At the moment nothing is confirmed, all rumour and conjecture which is why landlords are running scared and getting out.

    Before long, there will be no PRS to legislate, not sure where the displaced tenants will be living though!

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  3. Richard Tacagni

    The requirement to meet EPC Band C by 2025 was a government consultation proposal published in 2020. To date, government haven’t responded to the consultation and there is no draft legislation. Whilst upgrading energy efficiency is a good thing and minimum standards are sure to increase, there is currently no requirement to meet EPC Band C by 2025.

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    1. CountryLass

      I think an increase from an E to C is too much of a jump though. I deal primarily with older farmhouses and buildings in conservation areas or with listings, and even on the buildings we can do work on, it’s been hard to get to an E, and some of my Landlords have struggled to get £3,500 ready to spend on their rental property. When it reaches a cap of £10k, I suspect many Landlords will leave the sector, and several have already complained that their rental property has more insulation, newer windows and boiler than their own place, as they can’t afford to upgrade their own stuff after spending on the rental.

      Plus, wasn’t there a study by The Times yesterday that showed EPC’s were easy to fake on new builds, and inaccurate on most properties by between 90-300% of energy used?

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  4. Woodentop

    As a surveyor and an agent I can tell you now, you will loose most pre-1950 properties out of the rental market if they pursue this idea. Is is so expensive for many older properties to comply ….. you know the ones that should be on a chocolate box cover. Not the bland, plain and squeezed in boxes developers produce today that will not be standing up in 100 years time.

     

    This will be the final straw for many landlords who have hidden under the sheets, hoping this will go away. The cost and re-housing during redevelopment is a nightmare to take on. Many will leave because enough is enough, regardless of any suggestion it would be a good idea for the environment.

     

    If you think I’m wrong, …. why is the PRS is in the mess it is today? It can only get worse going forward and the northern towns and Wales will be hit the hardest and already in meltdown with landlords vacating the sector.

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  5. northernlandlord

    I am surprised that 38% of landlords fully comprehend the new proposed legislation when as others have pointed out nothing actually concrete has been put on the table to fully comprehend.  There was a consultation” Improving the Energy Performance of Privately Rented Homes in England and Wales” that closed in Jan 21 where views were sought but I don’t think there has been anything since. This consultation amongst other things talked about raising the improvement exemption figure from £3,500 currently to “at least” £10,000 and a fine of up to £30,000 per property for Landlords who didn’t comply. It also proposed that tenants should be able to demand EPC upgrades and should “grass up” their landlords if they don’t jump to it.
    Why England is proposing to jump from EPC E to EPC C for rented properties is a mystery. In Scotland D (moving up from E) has already been adopted with D having to be in place from 1 April 2022 for new tenancies and with all rental properties having to comply by 31 March 2025. I know from experience that upgrading from E to D does not involve really expensive and intrusive measures like floor and internal or external wall insulation or the installation of solar panels with payback times measured in decades. Normally desirable upgrades that you might do anyway like a bit more insulation in the loft, low energy bulbs and a decent boiler and controls can do the trick. In fact many EPC graded places on an old certificate that have since carried out the mentioned upgrades might well get a D if reassessed now.   
    Ever the pessimist I can foresee a future where many landlords will have to stump up thousands to upgrade an EPC and won’t be able to recover the costs as rents will be controlled. With wanting to sell not being a Mandatory ground once section 21 goes it would seem that wanting to sell up because you can’t afford to or don’t want to upgrade an EPC might not be a good reason for a judge to allow you to sell  your own property.  In any case CGT will be increasing, so you will be punished for staying in the PRS and punished for leaving it as well.
    One thing is for sure once a landlord leaves the PRS the property won’t plummet in value to a level where the poorest tenants can snap them up, they will be bought up by a lot of middle class first time buyers bolstered by the bank of Mum and Dad, so for ex-tenants it’s either paying 20% plus or more rent as supply tightens up or it’s the Council for a grotty B&B or hostel for years while they wait for something to come available.

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