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Four in five landlords had prepared for EPC legislation prior to Sunak net zero U-turn

Nick Cheek
Written By:
Nick Cheek
Posted:
Updated:
22/09/2023

Around 80% of landlord said that they were already prepared for upcoming EPC legislation deadline in 2025, which would have mandated a minimum EPC rating of C for new tenancies.

The legislation would have then been widened to all rental properties by 2028 but earlier this week Prime Minister Rishi Sunak reversed the decision on energy efficiency standards. He said he didn’t want to force households to pay for expensive energy efficient changes.

According to research from Shawbrook, which surveyed 1,012 landlords aged 18 and over, of the landlords who were prepared nearly a third said their properties already have an EPC rating of A-C, and half said they had plans in place to improve their EPC rating before 2025.

Around 17% said they were not prepared and had no plans to improve the EPC rating and only 3% said they had not heard of the regulation.

Nearly half of landlords said that they had spent between £500 to £20,000 on “improving or investing in their property” in the last year, with the average amount pegged at £25,148.

This average amount increases to £37,164 for London-based landlords.

A fifth pointed to the high cost of labour as a key concern in the next six months, but only 16% said that EPC regulations were a concern.

Over a quarter of landlords said that due to the legislation they were prioritising buying “newer, more energy efficient properties” in the next six months.

Regarding the possibility of the EPC deadline moving to 2028, 31% said it would give them more breathing space to make improvements and 29% said they would move ahead with their improvement plans regardless.

Landlords with energy efficient properties best placed

Emma Cox, managing director of real estate at Shawbrook Bank, said: “Scrapping the impending EPC regulations might free up capital in the short term for landlords who haven’t yet invested in improving the energy rating of their properties.

“But while policies shift, climate change is going nowhere, and energy efficient buildings will remain central to net zero plans. Rules might not be changing as soon as 2025, but professional landlords with modern, energy efficient stock will be in the best position to attract tenants, as well as reduce potential voids, and importantly, be prepared for future legislative change.”