Shawbrook, the specialist UK savings, development finance, and bridging finance bank, has conducted research which found that 15% of landlords are unaware of the upcoming changes to the EPC (Energy Performance Certificate) rules. In 2025, all properties with new tenancies will be required to have an EPC rating of C or above. In 2028, this will apply to all rental properties.
Millions of properties could potentially become ‘unrentable’ and therefore ‘unsellable’ or ‘unmortgageable’ due to the number of landlords being unaware of what will be required by 2025. In particular, older properties may need a substantial amount of work in order to gain an EPC rating of C or above, which may mean a loss of income whilst the work in carried out. 36% of landlords surveyed had pre-1940 properties, indicating a large number of landlords who will be required to make changes.
In total, 25% of the landlords had little to no knowledge of these future regulation changes. Those who have been renting properties for more than a decade had the least knowledge about the upcoming changes.
Emma Cox, Sales Director at Shawbrook Bank, comments: “The true extent of what this legislation could mean for the market has not yet been properly realised. Inaction could see a considerable percentage of the private rental sector declared unrentable or unsellable within a matter of years if landlords don’t take important steps now.
“Making changes to improve a property’s energy efficiency rating will help to improve the overall energy efficiency of the UK housing stock and to assist the government in meeting the ambitious net-carbon zero targets set out earlier this year. But on a more direct level, making the improvements ahead of the impending 2025 deadline will ensure that properties remain commercially viable for the short and long term for landlords. Putting off making necessary changes could leave landlords exposed to extended void periods when their property can’t be rented out while works are being completed.
“Mortgage lenders, and key players in the market, have a big role to play in supporting landlords by helping them to understand the new legislation, the potential impact this could cause and how to take action if required. Our research indicates a clear gap in landlords’ understanding of how the changes will impact them and their current yields. As well as these risks to landlords, renters may also be put in an even worse position as they compete for a smaller number of properties that are rated C or above after the 2025 deadline.”
Original article featured here…
At the close of last year, Emma Cox, Sales Director at Shawbrook Bank, noted the challenges faced by landlords with the new rules on EPCs. Emma pointed out the difficulties this will bring for those that own older rental properties, as improving their energy efficiency may take considerable work.