Landlords lack confidence in ability to improve EPC rating

Over a third of landlords (35%) are unsure of whether they can bring their properties up to achieve a C EPC rating, revealed the latest data from The Mortgage Works.

According to the poll of 753 landlords conducted by BVA Group / BDRC between 20th June and 5th July 2021, this is due to a lack of available capital, as well as lack of awareness regarding what it takes to achieve an EPC rating of C.

Current legislation in England and Wales requires BTL properties to have at least an EPC rating of E or above. 

However, in order to improve the energy efficiency of rental properties, the government wants to increase the requirement to a C rating for all new tenancies by 2025 and for all existing tenancies by 2028.

When it comes to the challenges landlords face in their attempts to meet the new sustainability requirements, 51% of respondents quoted the perceived property constraints as the biggest hurdle.

In addition, 44% of landlords said access to the property while tenants are renting, the level of disruption required to carry out the work and the limited payback on any investment were also significant challenges they anticipate.

Lack of funds was also listed as a significant challenge by 27% of respondents.

Landlords with larger property portfolios were more likely to face potential challenges than those with a smaller number of properties, especially when it comes to property constraints (66% for those with over 11 properties vs 49% with up to 10 properties). 

The same applied to access (50% vs 43%) and disruption (50% vs 43%).

The survey also revealed that 61% landlords say they will need to spend money to get their properties up to an EPC ‘C’ standard, with 14% expecting to spend all or more than their annual rental income to improve their properties.

However, a larger proportion of landlords don’t feel they will need to spend as much, with nearly a third (29%) say they will need to spend less than 30% of their annual rental income and 17% claiming it won’t cost them anything.

Daniel Clinton, head of The Mortgage Works, said: “Given the concerns and challenges facing landlords in not only making the necessary improvements, but financing them, it’s perhaps no surprise that more than a third of landlords are not confident they will be able to bring their properties up to the required EPC ‘C’ standard. 

“As more than two in five landlords say a lack of funds or access to finance is one of the biggest challenges they face in greening their properties, we are doing our bit to support them with the recent introduction of our green further advance product, with rates up to 50% lower than our standard further advance products.”

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