Only one-quarter of landlords have EPC rating of C or better

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71% of landlords in the UK still own rental properties with an energy performance certificate (EPC) rating of D or below, according to new research by Shawbrook.

The research also shows that only a quarter of landlords’ portfolios contain properties that all meet the C target for energy efficiency. 38% only have properties that are rated D or below.

The government has previously set out an aspiration for a minimum C rating in England and Wales by April 2025.

Future legislation could see landlords unable to take on new tenants or face fines if they fail to comply with the changes.

Landlords estimate that bringing the average property up to a C standard would cost them almost £2,000. However, there is a concern that with the cost of labour and materials going up, landlords could be underestimating the cost of the work.

The research shows that 79% of landlords with an active mortgage have at least one property rated D or below, indicating a role for lenders in making efficiency improvements. Shawbrook is continuing to offer EPC related discounts as part of its commitment to sustainability in the rental sector.

The findings are part of Shawbrook’s second EPC report. It explores the current EPC challenge, including the role of the cost-of-living crisis in driving change. It also investigates the knowledge gap and the role of government and the wider industry to support landlords in improving efficiency.

Emma Cox, managing director of real estate at Shawbrook, said: “It’s likely that efficiency standards will become tougher in the future, which is just one of the reasons that landlords should take note of these proposals and start making a plan.

“Landlords should know that they are not alone in this. Lenders, including Shawbrook, are working hard to help drive awareness of regulatory change, support with creative product options, and offer practical support to customers and partners. Standard products like bridging finance can also play a role in securing the future of the sector.

“During such a challenging period for the UK in general, we remain committed to bringing together all industry stakeholders to develop the conversation around EPCs, and to make real progress towards our shared goals.”

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