"The requirement to meet an EPC C rating will be the latest initiative that will require many landlords to make further investments, with the average cost of achieving such compliance coming in at around £8,000 per property"
- Craig Cooper - epIMS
The latest research from epIMS has revealed that over a third of all properties currently listed for sale have a EPC rating below a C, although this figure climbs as high as 46% in some major cities.
It’s Budget week and landlords are currently waiting with bated breath to see what rental market reforms could be introduced this Wednesday. Whilst it’s being widely predicted that changes to Capital Gains Tax will no longer apply to property, one initiative that is still expected to impact landlords is Labour’s commitment to a ‘greener’ housing market, requiring all privately rented properties to hold an EPC rating of C or above by 2030.
For those landlords who currently don’t meet this criteria, it’s estimated that the average cost of bringing a rental property up to standard in England currently stands at £8,000, a further cost that could dent buy-to-let investor appetites.
That’s because an analysis of over one million current for sale market listings, conducted by epIMS, shows that across Britain, 33.8% of potential buy-to-let investment opportunities don’t currently meet the proposed EPC C requirement.
In Wales, this figure stands at 50.1%, in Scotland, it’s 45.7%, whilst England is home to the most compliant investment opportunities, although 33.2% of current for sale listings still fail to meet the proposed minimum, as they currently have an EPC rating of D or worse.
The same analysis of for sale stock across 15 major cities by epIMS shows that Bradford is home to the least energy-efficient investment opportunities.
46.2% of all homes currently listed across the city have an EPC rating below a C, with Edinburgh (39.6%), Brighton (39.4%), Bristol (33.9%) and Nottingham (33.5%) also some of the worst offenders in this respect.
London is home to the most energy efficient for sales market at present, although just shy of a quarter (23.5%) of all homes currently listed for sale still only achieve an EPC rating of D or below.
COO of epIMS, Craig Cooper, commented: “Landlords have had to contend with a raft of legislative changes in recent years, the vast majority of which have dented the financial returns they see from their investment portfolio.
"The requirement to meet an EPC C rating will be the latest initiative that will require many landlords to make further investments, with the average cost of achieving such compliance coming in at around £8,000 per property.
"A greener rental sector is, of course, a positive, however, the issue is that the Government takes a fabric-first approach with regard to energy efficiency and that isn’t always the most cost-effective route for landlords. For example, small changes such as installing PV panels is far more affordable than internal or external wall installation but could be just the strategy needed to achieve the C threshold.
"This mitigates the need for landlords to spend more than they have to, which in turn reduces the chance that these costs will be passed onto tenants in the form of rental increases, leading to a far less disruptive landscape for renters themselves.”
