UK Finance has warned that mortgaged landlords’ properties won’t reach EPC C until between 2037 and 2043 – way off the expected 2030 target.
The banking body says the scale of the challenge is very real, along with the possibility that landlords will seek to exit the market in large numbers if they can’t meet the standards and deadlines, or if the PRS no longer supports their financial needs for investment.
The government is currently consulting on improving the energy efficiency of privately rented homes in England and Wales, but given that the Renters’ Rights Bill aims to abolish Assured Shorthold Tenancies, the frequency of new tenancies is likely to increase, predicts UK Finance, as will the number of properties caught by the 2028 date.
“We therefore recommend abandoning the proposed 2028 deadline for new tenancies,” its consultation response explains. “The timescale is challenging and overly ambitious, particularly if many properties cannot be improved on time in an economically viable and cost-effective way. Achieving the 2030 deadline for all tenancies will depend on landlords’ understanding of what improvements need to be made to achieve the standard.”
It believes that to substantially reduce the current timeline, new measures should be introduced along with better information, more appropriate financial support and financing products.
It suggests considering a solar panel discount for landlords and improved export rates paid via the Smart Export Guarantee. It also believes the government could apply extra discounts to the Boiler Upgrade Scheme for landlords, widen the scope of the Warm Homes Local Grant and/or introduce a rebate on the additional property stamp duty land tax charge when a property is upgraded.
“We believe that a requirement for large up-front investments, due to a disproportionately high cost cap, may result in some landlords leaving the sector or rationalising portfolios. This would simply shift the problem into a different tenure, without resolving the key issue.”
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