The Mortgage Works (TMW) published a report stating that ‘Landlords lack confidence in ability to get properties up to EPC ‘C’ standard’
With less than four years left until the Government wants all new private rented tenancies to be in properties with at least an Energy Performance Certificate (EPC) rating of ‘C’, new research uncovers a lack of confidence from landlords about bringing their properties up to the required standard in time.
Current legislation in England and Wales requires buy to let properties to have at least an EPC rating of ‘E’ or above. However, in order to improve the energy efficiency of rental properties, the Government wants to increase the requirement to a ‘C’ rating for all new tenancies by 2025 and for all existing tenancies by 2028. Many lenders have already raised the EPC rating requirements they need any potential buy to let property to have, in order to prepare for the new legislation.
The poll, which drew data from around 750 buy to let owners, found that 35% of owners believe they won’t be able to bring their properties up to the required energy efficiency standards.
Below are some of the most common issues buy to let owners face when trying to meet the EPC rating of ‘C’ or above:
Property constraints (i.e. limitations on what is possible for the building)
51% of owners polled said property constraints would stop them from being able to complete the requisite work.
Access to the property whilst tenants are renting
44% of owners polled said property constraints would stop them from being able to complete the requisite work.
Level of disruption required to carry out the work
44% of owners polled said property constraints would stop them from being able to complete the requisite work.
Limited payback on any investment
44% of landlords polled said property constraints would stop them from being able to complete the requisite work.
Limited tangible benefit to the tenants
35% of owners polled said property constraints would stop them from being able to complete the requisite work.
Finding reputable tradespeople
34% of owners polled said property constraints would stop them from being able to complete the requisite work.
Finding available tradespeople
30% of owners polled said property constraints would stop them from being able to complete the requisite work.
Hassle of managing the extra work
27% of owners polled said property constraints would stop them from being able to complete the requisite work.
Knowing what is required/appropriate
27% of owners polled said property constraints would stop them from being able to complete the requisite work.
27% of owners polled said property constraints would stop them from being able to complete the requisite work.
Although the figures paint a bleak picture for landlords meeting the new EPC rating requirements, it’s not all bad news. 10% of owners said they don’t anticipate facing any challenges at all in meeting the new rules.
Landlords with larger property portfolios were more likely to face potential challenges than those with a smaller number of properties, especially when talking about property constraints (66% for those with 11+ properties vs 49% with 1-10 properties), access (50% vs 43%), and disruption (50% vs 43%).
Green money
More than six in ten (61%) landlords say they’ll need to spend money to get their properties up to an EPC ‘C’ standard. More than one in ten (14%) of them say they’ll need to spend all of their annual rental income, and perhaps even more than that, on making the improvements to their properties. However, a larger proportion of landlords don’t feel they’ll need to spend as much with nearly a third (29%) saying they’ll need to spend less than 30 per cent of their annual rental income. Nearly one five (17%) won’t need to spend anything at all.
The real issue
Even if the money is available, around one in ten (11%) landlords admit they have no idea of what work is required and don’t know where to start. Only 41% say they have either a good or clear idea on how to implement the changes needed.
That figure increases to more than half (55%) of those with 20 or more properties in their portfolio.
Of course, if clients have any questions on this, or are wondering how to raise finance needed to make property improvements, we are on hand to help and provide any advice they may need. Why not contact us and discuss the best options for you and your properties on 0207 8877 1169.
