Government proposals to tighten Energy Performance Certificate (EPC) requirements have overtaken tax and interest rates as the leading reason landlords intend to sell, according to new research from Pegasus Insight.
The mortgage market specialist’s latest Landlord Trends report, covering the second quarter of 2025, found that 38% of landlords plan to sell at least one property in the next 12 months, with energy efficiency regulations cited more frequently than any other factor influencing that decision.
The findings point to a clear shift in priorities across the private rented sector, as the cost and uncertainty of meeting future EPC targets begin to reshape portfolio strategies.
Pegasus Insight’s data shows that more than half of landlords – 56% – hold at least one property rated ‘D’, while a further 20% own homes rated ‘E’, ‘F’ or ‘G’. On average, 42% of a landlord’s portfolio currently falls short of an EPC ‘C’ rating. The challenge is most pronounced among larger operators: 78% of those with 11 or more properties have an average of 9.2 homes rated ‘D’ or below.
Mark Long, founder and director at Pegasus Insight, said: “Energy efficiency rules are now a decisive factor in landlords’ business decisions. With around half of rental stock still below the target EPC threshold, the cost and complexity of upgrades are prompting many to rethink their portfolios.
“This is a pivotal moment for the sector: the ambition to improve energy standards is welcome, but without clearer guidance and practical support, there’s a real risk that good landlords will simply choose to exit the market rather than invest.”
The report also found that confidence about future regulation remains subdued, with widespread uncertainty over the timing, scope and cost implications of EPC and Minimum Energy Efficiency Standard reforms.
The Landlord Trends Research Report Q2 2025 is based on 794 online interviews with members of the National Residential Landlords Association, conducted between 22 June and 7 July 2025.
