Landlords lack confidence in improving property EPC rating due to cost and awareness
More than a third of landlords are not confident about updating their properties to have an Energy Performance Certificate (EPC) of C or higher, which will be required in the next four years as part of new government legislation.
According to research from The Mortgage Works (TMW), which polled around 750 landlords, respondents said this was due to a lack of capital and awareness about how to achieve it.
The UK government currently requires buy-to-let properties to have an EPC rating of E or above, but there are plans to raise it to C for new tenancies by 2025 and for all existing tenancies by 2028.
The biggest challenges for landlords to meet new sustainability requirements include property constraints, with 51 per cent citing it as a concern.
This was followed by access to property whilst tenants are renting and disruption whilst works are carried out, which both came to 44 per cent.
The report also noted that portfolio landlords were more likely to face challenges than individual landlords, with 66 per cent of those with 11 properties or more citing property constraints as a concern. This figure dropped to 49 per cent for those with one to 10 properties.
What they’re worried about
Half of portfolio landlords with 11 or more properties said gaining access to homes while tenanted and disruption caused by construction posed issues, while 43 per cent of landlords with one to 10 properties cited those reasons as barriers.
Affordability is also a problem, with more than a quarter of landlords saying a lack of funds was the biggest challenge for them.
Around six in 10 landlords said they would have to spend money to get properties up to standard and 14 per cent stated they would need to spend their annual rental income or more.
TMW’s head Daniel Clinton said it was not surprising that landlords were not confident in their ability to update their properties, and added the lender had brought out a Green Further Advance product earlier this year to support them in doing this.
The product has a rate of 1.49 per cent. It is available to existing customers and permits loans between £2,500 and £15,000 with a maximum loan to value of 75 per cent.
It is available on two-year and five year-fixed rate terms, and landlords who make green improvements can benefit from rates can be up to 0.50 per cent lower.
Clinton added: “It’s also great to hear that the government would like to introduce a new financial support package to help people improve the energy efficiency of their homes, however, we hope that any such scheme would also be open to helping landlords meet their requirements.”