Energy Efficiency – will landlords meet the Government targets?

The Government’s targets and challenges

The Government set out plans for all new tenancies in the private rented sector to have an EPC rating of a ‘C’ by 2025. While these changes will be extended to all tenancies in the sector by 2028.

Depending on the current energy efficiency rating, the age of the building, and the type of property the landlord owns, the amount of work and funding that is required to get it up to scratch will vary.

The Government proposed the improvements necessary to meet these targets are likely to cost up to £10,000. However, with labour and the cost of materials at an all-time high, this estimate may be unrealistic.

In an analysis of data from the English Housing Survey, Propertymark forecast that 40% of privately rented homes in England will not achieve the ‘C’ grade energy efficiency rating. According to research eight years up until 2020, privately rented homes with a C grade EPC went from 19% to 39%.

If the growth continues at this previous rate, Propertymark anticipates only 60% of privately rented homes will achieve this rating by 2028.

The National Residential Landlords Association (NRLA) urge the government to provide a package of fiscal measures to help landlords invest in the energy efficiency of their properties. 

In addition to this, the NRLA is calling for better clarity on the dates to reach these targets as well as clarification on when a response to the Improving the energy performance of privately rented homes consultation will be released. 

Landlord sentiment surrounding energy targets

Shawbrook Bank's Confronting the EPC Challenge whitepaper helps understand landlord sentiment surrounding the EPC targets.

The details show 23% of landlords own properties rated D or less. The figure could also be higher as a further 27% revealed they were unaware of their EPC rating.

Many landlords (37%) would like incentives and better borrowing rates to meet the 2025 deadline. In addition to this, 47% called for more guidance surrounding the EPC changes.

As information emerges landlords must stay up to date and take initiative by preparing their homes. An excellent starting point would be to get a new EPC carried out by a professional. This will detail, recommended improvements to achieve a better rating as well as the possible rating if changes are made.

Here at Farrell Heyworth, we operate in the busy North West towns and villages of Barrow in Furness, Morecambe, Lancaster, Garstang, Cleveleys, Fulwood and Chorley. To find out how we can assist you on your lettings journey, please get in touch with us today.

We encourage all our customers to register with our My FH portal, which will give you access to the most up-to-date information; remotely and at your convenience.You can also find out how much you could be charging on the local rental market by requesting a free and instant online valuation today.