Landlords lacking confidence to improve property energy efficiency
Em Morley - September 3, 2021
Landlords are lacking in confidence when it comes to improving the Energy Performance Certificate (EPC) rating of their properties, research from The Mortgage Works (TMW) shows.
With less than four years left until the Government wants all new private rented tenancies to be in properties with an EPC rating of at least ‘C’, this research highlights a number of challenges.
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.
A poll of around 750 landlords found 35% of respondents are not confident they will be able to bring their properties up to the required energy efficiency standard.
The research highlights issues such as property constraints, which more than half (51%) think will be a hurdle.
Property constraints (i.e. limitations on what is possible for the building)
Access to the property whilst tenants are renting
Level of disruption required to carry out the work
Limited payback on any investment
Limited tangible benefit to the tenants
Finding reputable tradespeople
Finding available tradespeople
Hassle of managing the extra work
Knowing what is required/appropriate
Lack of funds
14% of landlords say they will need to spend all of their annual rental income, perhaps more, on making improvements to their properties. However, 29% say they will need to spend less than 30% of their annual rental income. 17% responded that they won’t need to spend any money at all.
Funding side, 11% of landlords admit they have no idea of what work is required and don’t know where to start. 41% say they have either a good or clear idea on what to do. That figure increases to 55% of those with 20 or more properties in their portfolio.
Daniel Clinton, Head of The Mortgage Works, said: “Given the concerns and challenges facing landlords in not only making the necessary improvements, but financing them, it’s perhaps no surprise that more than a third of landlords are not confident they will be able to bring their properties up to the required EPC ‘C’ standard.
“As more than two in five landlords say a lack of funds or access to finance is one of the biggest challenges they face in greening their properties, we are doing our bit to support them with the recent introduction of our Green Further Advance product, with rates up to 50% lower than our standard further advance products. It’s also great to hear that the Government would like to introduce a new financial support package to help people improve the energy efficiency of their homes, however, we hope that any such scheme would also be open to helping landlords meet their requirements.”