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A quarter of landlords are looking to buy higher-rated EPC properties

Nick Cheek
Written By:
Nick Cheek

A quarter of landlords are buying higher-rated energy performance certificate (EPC) properties in light of the Government’s upcoming legislation, research has found.

According to specialist lender Paragon, who surveyed 1,200 landlords, around 15% have bought a property with an EPC rating between A and C in anticipation of “tougher requirements”.

A further 10 per cent are buying EPC D-rated property with a view to upgrading.

The Government’s EPC legislation, which is not yet law, could mandate that new rental tenancies have a minimum EPC rating of C by 2025 and all tenancies to meet that standard by 2028.

Secretary of State for Levelling Up Michael Gove suggested last week that legislation could be relaxed.

The research also shows that 19% have made improvements to bring a property to an EPC rating of C or higher, and 14% said that they were looking at retrofitting their properties to increase their EPC rating.

Around 9% of landlords said they had sold property that would be too expensive to upgrade to meet upcoming standards and seven per cent were selling homes unable to reach an EPC rating of C or higher.

Approximately 61% of landlords surveyed said they would look to buy properties between EPC rating of A and C and 18% would look at properties with an EPC rating of D or E with the intention of upgrading them.

Around two per cent would do this for EPC rated F or G and the remaining 19% said EPC ratings would not impact their future decision making.

Progress made on EPC but more ‘education needed’

Louisa Sedgwick, commercial director at Paragon Bank said: “Michael Gove’s recent comments mean it’s looking increasingly likely that any new PRS energy efficiency standards will be delayed.

“Nevertheless, it’s encouraging to see landlords are already building on the progress made over the last decade in making privately-rented homes more sustainable.”

She added: “Most commonly, this has been through buying homes that already meet the new standards proposed by the government, incentivised by green mortgage products.

“But, with a significant proportion of landlords already making upgrades to improve the energy efficiency of the properties they already own, or planning to do so in future, we see a need for financial support as well as education on what can be a complex and costly undertaking, something that presents huge opportunities for the sector.”