New Energy Rules for Rental Property Could Force Many Landlords to Sell Older Properties

New energy efficiency rules, which come into effect in 2025, could force up to two-thirds of landlords to sell their rental properties, according to a report by the National Residential Landlords Association (NRLA).

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What are the new energy performance regulations?

The new regulations will require landlords to ensure their rental properties have an Energy Performance Certificate (EPC) rating of at least band C. Currently, around 20% of rental properties have an EPC rating of band F or G, which are the lowest ratings possible.

The NRLA report found that around 40% of landlords said they would need to spend more than £3,000 to improve their properties' energy efficiency to meet the new standards. However, around 10% of landlords said they would need to spend more than £10,000 per property.

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What is the impact on the Private Rental Market?

The NRLA also found that around a third of landlords who own rental properties with an EPC rating of F or G were planning to sell their properties before the new regulations come into effect.

The report warns that the new rules could have a significant impact on the private rented sector, as many landlords could be forced to sell their properties, resulting in a reduction in the supply of rental properties.

Chris Norris, director of policy and practice at the NRLA, said: "These findings should set alarm bells ringing in Whitehall. Ministers cannot approach the deadline for the new regulations with a business as usual attitude. Without a concerted effort to support landlords, we risk a damaging fall in the supply of rental homes."

The NRLA has called for the government to provide financial support to help landlords improve the energy efficiency of their properties. It also suggested that the government could allow landlords to offset the costs of improving their properties' energy efficiency against their tax bills.

Overall, the new regulations aim to improve the energy efficiency of homes in the UK, reduce carbon emissions, and tackle climate change. However, the NRLA report highlights the potential unintended consequences of the new rules, particularly for the private rented sector.

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What is the solution for Buy-to-Let property investors?

As a result, many landlords are re-investing into new build property, which are constructed to a higher energy rating standard, ensuring that they are compliant without having to make any costly upgrades to the property.

For further information on the wide-range of new build property investments, please click here to speak with one of our property experts today.

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