Landlords who postpone upgrading their properties to the Energy Performance Certificate C rating could face large fines if they miss the 2030 deadline. With a national skills shortage, there is the real chance that they may not get the work done in time, posing a significant risk to portfolios.
Our recent survey found that over half of landlords with properties rated below C rating are putting off work to bring their properties up to the required standard.
And a small number of landlords with properties rated below C are not planning to make any changes at all, even though they will continue to rent. Surprisingly, just over 5% of landlords didn’t know what their EPC rating was.
EPC RATING DEADLINE
The Government has brought back the EPC rating deadline for all rental properties to have a rating of at least a C or above by 2030. The Government’s aim is to make rental homes more energy-efficient, reduce carbon emissions and improve sustainability.
This requirement covers all privately rented homes, including buy-to-let properties. Those landlords who don’t comply could see substantial fines, potentially reaching £30,000.
Everyone deserves a decent home, whether for rent or to buy, and it is only right that all rental properties should be well-insulated, warm and safe. Energy-efficient improvements to rental properties will make rentals more attractive to tenants and easier for landlords to let out.
LANDLORD CHALLENGE
But at the same time these new demands potentially present big challenges for landlords. They may need to put in new heating systems, insulation, or double glazing and these upgrades come with upfront costs.
Those landlords with older properties, which tend to be more difficult to adapt, may face not only big refurbishment expenses but planning and conservation hurdles.
If the C rating target is to be achieved, many landlords are likely to need Government support. Landlords whose properties are in more deprived areas or have low-income tenants already have some help, including up to £30,000 for a single property and up to £15,000 subsequently through the Warm Homes: Local Grant scheme. But the sector will no doubt be seeking more support.
BELOW C RATING
Our survey showed that just over a third of landlords, 35%, said their properties fell below C rating, with half being above C. The survey revealed that 58% of landlords with properties currently rated below a C will wait until nearer 2030 to do the work, with only 18% saying they would do upgrades as soon as possible. Six per cent won’t make any changes at all even though they intend to continue renting and 18% will sell the property.
The survey also showed that those landlords who had between 11 to 20 properties had the most properties rated between D to G at 36%. These were followed by landlords who had between four to 10 properties, at 27%.
It’s encouraging that half of our landlords have properties at C rating or above. But those landlords who don’t fall into this category, and who are putting off upgrading their properties to the last minute, need to be careful. Kicking the can down the road may mean that, with a national skilled worker shortage, landlords risk not getting the work done in time.
EXTRA FINANCING
As a buy-to-let lender we are here to help too should landlords need extra financing for upgrade work.
We remain committed to doing our bit, innovating to meet the needs of landlords. By leveraging our in-house technology and broker portal, we can identify opportunities and take action very quickly. This means brokers have access to a competitive range of products to support the many landlords still seizing opportunities and making moves in the current market.
LATEST CHALLENGE
It should be noted that the buy-to-let sector over its 30-plus year history has weathered regulation before, as well as economic crises and political turmoil over the years. EPC regulations are simply the latest challenge.
Buy-to-let offers a master class in resilience and continues to thrive. Demand for decent rental properties already continues to outstrip supply, with many tenants ready and willing to rent across the country.
Opportunities for landlords are there. But they must ensure their properties comply with the EPC deadline. Putting off upgrades and kicking the can down the road may put portfolios at risk.
Rob Stanton is sales and distribution director at Landbay
