Half of landlords have made energy-efficiency improvements to their properties in the last six months, according to research from Shawbrook Bank.

The buy-to-let lender also found that renters are much less likely to consider inefficient properties with low Energy Performance Certificate (EPC) ratings. It discovered that nearly three-in-five (58%) of renters said they’d be less likely to consider a property with an energy rating of D or below.

The government has already proposed changes to minimum EPC requirements for rented homes.

It’s widely expected – although not yet written into law – that landlords will have to meet a minimum EPC standard of C for all newly rented properties in England and Wales from April 2025. The measure would apply to existing tenancies from 2028.

Despite the potential looming rule changes, more than a third of landlords admit they know only ‘a bit’ about the changes.

Impact of the rule changes

There are concerns that many landlords could sell their properties and exit the market rather than invest in them, reducing the availability of rental properties.

Nearly two-thirds of landlords say they could sell their properties in the next five years because of the burden of EPCs. Nearly two-in-five mortage advisers with buy-to-let clients have already seen them exit the market rather than make energy-efficiency improvements.

Emma Cox, managing director of real estate at Shawbrook, said: “Whatever happens with the government’s proposals, it’s clear that landlords need to be thinking about making energy efficiency improvements to safeguard their rental properties.

“As well as the need for clarity from policymakers, the industry has a significant role to play in supporting landlords. Only by working together can the industry play its part in safeguarding the future of the private rented sector.”

Chris Norris, policy director at the National Residential Landlord Association, added: “The efficiency of our housing stock needs to improve but the challenge for the private rented sector is two-fold.

“On the one hand, there is the matter of the split incentive, where landlords are necessarily required to pay for the works but see little or none of the benefit. On the other, there is the net cost of the works required, which is substantial to say the least.

“The investment required in our housing stock represents a potential burden for many landlords that they are highly unlikely to be able to shoulder alone, without significant changes to the tax system and some form of financial assistance along the way.”