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One in seven landlords unaware of looming energy-efficiency rules

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11/01/2022
Landlords risk their properties becoming unrentable if they don't meet the required standards by 2025
One in seven landlords unaware of looming energy-efficiency rules

Many landlords are in the dark over the rule changes on energy efficiency, according to a study by Shawbrook Bank.

The specialist lender found that 15% of landlords it surveyed have no knowledge of the upcoming changes to Energy Performance Certificate (EPC) rules.

That’s despite the fact that properties risk becoming ‘unrentable’ if landlords don’t make the necessary changes in time for the deadline in three years.

What’s changing?

From 2025, all newly rented properties will be required to have an EPC rating of C or above. Currently properties only require an EPC rating of ‘E’ or above. Existing tenancies will have until 2028 to comply with the new rule changes.

As a result, millions of properties risk potentially being declared ‘unrentable’. Landlords currently unaware of the level of work needed on their property, or properties, could be risking a loss in income until all necessary work is carried out.

In severe cases, where a substantial amount of work needs to be done to improve a property’s EPC rating, landlords could find themselves unable to secure appropriate financial support to carry out the works.

Lack of knowledge

A quarter (25%) of landlords said they had little to no knowledge of the forthcoming changes, with long-time landlords – those who have been renting out properties for over 10 years – found to be less aware of the changes and what impact this could have on their properties.

With a large proportion (36%) of landlords with properties built pre-1940, Shawbrook’s analysis suggests that a significant number of landlords will be required to make changes.

Emma Cox, sales director at Shawbrook Bank, said: “The true extent of what this legislation could mean for the market has not yet been properly realised. Inaction could see a considerable percentage of the private rental sector declared unrentable or unsellable within a matter of years if landlords don’t take important steps now.

“Making changes to improve a property’s energy efficiency rating will help to improve the overall energy efficiency of the UK housing stock and to assist the government in meeting the ambitious net-carbon zero targets set out earlier this year.

“But on a more direct level, making the improvements ahead of the impending 2025 deadline will ensure that properties remain commercially viable for the short and long term for landlords. Putting off making necessary changes could leave landlords exposed to extended void periods when their property can’t be rented out while works are being completed.”

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