A survey of over 600 landlords by a business insurance service has found that 55 per cent have still to make improvements to their properties to enhance their energy efficiency.
As most landlords know, those in England and Wales can only let properties that have a minimum Energy Performance Certificate rating of E.
As part of the Minimum Energy Performance of Buildings Bill, the government is considering increasing the minimum EPC requirement to C for all new tenancies by 2025 and for all existing tenancies by 2028.
Simply Business, which conducted the survey, says that if the minimum EPC rating for rental homes is indeed increased, 55 per cent of the respondents said they would need to improve their properties to make them more energy-efficient.
Almost a third of landlords regarded making properties energy efficient as a key challenge, while one in six said they were worried about their ability to maintain their properties.
The survey revealed that changes to minimum energy efficiency standards are likely to cost landlords a significant sum of money.
Around a fifth estimated that they’ll have to spend over £10,000, and a quarter anticipated spending between £5,000 and £10,000.
Improvements that can increase a property’s energy efficiency include cavity wall insulation, solar panels, and double glazing.
Meanwhile, the government recently announced the details of a Boiler Upgrade Scheme, allowing landlords to claim £5,000 towards the cost of an air source heat pump.
Simply Business cites two landlord respondents in its survey.
First off is Chris Clegg, a buy-to-let landlord in the North West who owns a portfolio of five properties nationwide. He says: “The new regulations and licensing are coming too hard on the heels of the pandemic. I've temporarily lost money so cash is very tight. Then I have to spend thousands on licences, and thousands more on EPC efficiencies. It’s very close to impossible.”
And secondly, Jeremy Wadley, who owns multiple properties in Bristol and North Somerset, adds: “If the EPC changes come into force, I am concerned about the costs. If I'm raising from an E to a D, then I would be happy with this as costs per property will reach approximately £500, but if it’s raising to a C, then predicted costs are £5,000 per property. On top of losses from the pandemic, increased taxes, increased regulations… it’s unrealistic.”
Alan Thomas, the chief executive of Simply Business, comments: “With a potential 2025 deadline for a new minimum EPC rating fast-approaching, our study has revealed the worries facing landlords who will need to make drastic and costly improvements to increase the energy efficiency of their properties.
“The rising cost of living is having an impact on us all but with the prospect of tighter EPC rules on the horizon, landlords are feeling the squeeze. Many are concerned about how they’ll fund these improvements and whether they’ll be completed in time.
“This is putting significant financial pressure on landlords and, with a fifth already concerned about their properties' ability to generate revenue, this could be a real threat to the rental market.
“Insuring over 300,000 landlords has offered us a fresh perspective on the significant role they play in providing safe and affordable housing, in addition to the £16 billion annual contribution to the economy. Therefore, it’s important they receive the necessary support, education, and clarity to meet the requirements set by the government.”
Via @LandlordToday