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Landlords making properties greener ahead of energy-efficiency rules

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08/11/2021
Only properties with an EPC rating of C or above will be able to be rented to new tenants from 2025
Landlords making properties greener ahead of energy-efficiency rules

Landlords are taking steps to improve the energy efficiency of their rental properties, said Shawbrook Bank, ahead of rules that require them to meet a minimum Energy Performance Certificate rating of C by 2025.

The buy-to-let specialist said that 17% of buy-to-let landlords have undertaken a refurbishment in the last 12 months to improve the energy efficiency of their home.

The new rules mean rental properties with an EPC rating of D or below will not be able to take on new tenants from 2025. By 2028 all existing tanancies will need to be in properties with an EPC rating of C or above.

According to data from the Ministry of Housing, Communities and Local Government there are close to 13 million homes in England and Wales currently with an EPC rating of D or below.

For those landlords who own older properties – which are typically less energy efficient – it can be harder to improve the rating. This could mean that by 2025 some properties could be ‘unrentable’ and ‘unsellable’.

Change is coming

Of all the landlords that had undertaken a refurbishment, 22% had replaced the boiler and heating system in their property, a further 23% had replaced the windows, and 18% had installed new white goods. All these actions could impact a property’s EPC rating and help landlords move closer to achieving a rating of C or above.

Making properties more energy efficient can also boost demand from tenants, with one in 10 private renters said that they would stay in their current property longer if their landlord made changes to the property. Tenants were also happy to pay more in rent – 18% of tenants said they’d pay more if windows were replaced, 15% would pay more for a new boiler and heating system, and 10% suggested that installing solar panels would justify paying more rent.

John Eastgate, MD of property finance at Shawbrook Bank, said: “It’s welcome news that landlords are already acting ahead of the rule change in 2025 and it’s completely right that we should all be considering how to make our properties more energy efficient and environmentally friendly.

“Some owners, however, will need support from both lenders, and the government, to make these changes financially possible. Without this, we risk a substantial part of the private rental sector becoming unrentable and therefore unmortgageable and unsellable. With homeownership still out of reach for many this could leave us with a shortage of quality homes to rent.”

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