Landlords Concerned About New EPC Regulations: What You Need to Know

With new Energy Performance Certificate (EPC) regulations on the horizon, landlords across the UK are feeling the pressure. The latest government mandate requires rental properties to have an EPC rating of C or above by 2030. This has left many landlords questioning how they’ll meet these standards, with a large number calling for government support to help cover the costs.

Government Support Needed for EPC Compliance

According to recent research from Shawbrook, 29% of landlords believe that reaching these new targets will only be feasible with government assistance. The primary concern? The financial burden of making the necessary upgrades. With rising material and labour costs, 16% of landlords admit they’d struggle to afford the changes, while 25% are considering selling properties that would need significant improvements.

Landlords Already Making EPC Upgrades

Despite these concerns, some landlords have already started improving their properties in anticipation of the new rules. In fact, 21% of landlords have taken steps to increase their property’s EPC rating to C, even before the previous government scrapped the targets last year. Additionally, 22% have upgraded their properties, with their homes now meeting or exceeding the C rating requirement.

Professional Portfolio Landlords Leading the Way

It’s notable that professional portfolio landlords, particularly those with four or more properties, are ahead of the curve. A quarter of these landlords have already made the necessary upgrades, compared to just 17% of smaller landlords with 1-3 properties. Shawbrook’s previous research from 2022, as part of its Confronting the EPC Challenge white paper, revealed that over half (54%) of landlords were already taking action to improve energy efficiency due to tenant demand and rising energy costs.

EPC Target Confusion: A Setback for Some Landlords

Although many landlords had begun upgrading their properties, the uncertainty surrounding the EPC targets created confusion. The original 2030 deadline was never confirmed, leading some landlords to pause or delay their renovation plans. Now, with the deadline reinstated, those landlords must make up for lost time.

Rising Energy Costs Driving Tenant Demand for Energy Efficiency

As we approach another winter with rising energy costs, tenants are increasingly seeking energy-efficient homes. But for landlords, the cost of making these upgrades has also risen sharply. Without additional support, many landlords will find it challenging to meet the new EPC standards, particularly for older properties, which tend to have lower ratings.

The Scale of the Challenge: Older Properties at Risk

The UK housing stock is one of the oldest in Europe, with much of it built before 1950. As a result, around 12% of private rental properties are currently rated E to G, well below the new EPC requirements. Properties in the North, in particular, are disproportionately affected by the cost of improvements, where a £10,000 investment can represent a much larger percentage of the property’s value compared to similar works in London.

What’s Next for Landlords?

With just over five years left to comply with the new EPC regulations, the clock is ticking for landlords. As Emma Cox, Managing Director of Real Estate at Shawbrook, explains, “Landlords are motivated to improve their properties, but the scale of the task ahead is clear. Government and industry support will be essential in ensuring a sustainable, energy-efficient rental market in the UK.”

If you’re a landlord, now is the time to start planning for these changes. Visit our website to learn more about how we can help you navigate the new EPC regulations and keep your property investments compliant.

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