The energy efficiency of rental property has moved from being a regulatory side note to a central concern in the buy-to-let market.
What started as a policy push has now turned into a deeper behavioural shift among landlords, shaped by their own responsibilities in this area, but also lender strategies, changing tenant expectations and the ever-present issue of regulatory change.
The government require landlords of all PRS properties to have an EPC of C by 2030, and while that deadline is far away, as we know, there are other advantages available in terms of securing this level sooner rather than later.
OPPORTUNITY KNOCKS
Within this context, advisers continue to have a powerful opportunity to guide landlord clients through an increasingly complex terrain where sustainability, portfolio value and mortgage strategy are becoming more deeply entwined.
As it stands, of course, the government still prohibits the letting of properties rated EPC F or G, unless the landlord qualifies for an exemption. These rules have been in force since April 2020 under the Minimum Energy Efficiency Standard (MEES) regulations and remain very much active.
However, the direction of travel towards 2030 is now a lot clearer. Policy direction continues to favour energy efficiency and decarbonisation, and any landlord hoping to futureproof their portfolio should be acting now, not hanging around until the last minute.
That’s where advisers come in. Landlords are not just worried about whether they’ll be allowed to let a property in future, they’re increasingly concerned about tenant demand, running costs, and long-term asset value.
Recent research found that 25% of landlords are actively seeking higher-rated EPC properties. That’s not just because of government pressure, it’s a result of seeing better energy efficiency as a marker of better-quality assets. These landlords are adapting now, even without the stick of regulation, and many more are expected to follow.
TRANSITIONAL SUPPORT
Mortgage advisers have a unique opportunity to support this transition and, as a lender, we believe we have a responsibility to act in this area and support landlord borrowers.
So, rather than shying away from energy efficiency, we have embedded this directly into our product design. Advisers can access preferential mortgage pricing for clients purchasing or refinancing properties with an EPC rating of A to C – instantly giving a financial benefit to those landlords already ahead of the game.
We also continue to support those seeking to move up the EPC ladder, with our £1,000 cashback incentive. Landlords taking a fixed-rate product with us can earn the cashback if they improve their property’s EPC to C or above during the term of the deal. It’s a tangible reward for doing the right thing and we believe it’s exactly the kind of support landlords need to take action.
The beauty of this model is that it’s not about punishing landlords who have older stock. It’s about giving them a reason to act. Retrofitting a property isn’t always cheap or easy, and with limited outside government grants and/or funding available, many landlords have put it off.
The £1,000 cashback could go a long way toward insulation, window upgrades, or a more efficient boiler. And the benefits are two-fold – not just for regulatory compliance, but also in terms of tenant satisfaction, property valuation and remortgage eligibility down the line.
We also have to acknowledge there is a strategic benefit for lenders too. Encouraging energy-efficient upgrades helps safeguard the quality of our lending book. A property that meets higher EPC standards is likely to remain lettable and retain better long-term value. That reduces portfolio risk.
TOUCHPOINTS
Plus, we believe our approach is adviser-friendly because creating a number of advice touchpoints: acquisition decisions, refinance planning, and product transfer conversations can all include energy efficiency as a value lever.
Advisers who help clients make smart moves now – whether acquiring high-performing stock or upgrading existing units – will not only protect their landlord clients from future shocks but also cement their role as strategic partners.
In short, the landscape is changing. Energy efficiency isn’t a niche topic for the eco-conscious; it’s becoming a mainstream concern affecting property value, mortgage pricing, tenant demand and regulatory exposure.
For mortgage advisers, it’s a toolkit and an opportunity – to deliver real value, deepen client relationships, and ensure landlords aren’t just reacting to policy but staying one step ahead of it.
