Half of landlords with properties rated EPC band D or below are considering selling property ahead of expected legislation that will require all rental properties to have an energy-efficiency rating of at band C by the end of 2028.
So says lender The Mortgage Works (TMW) which has polled some 600 landlords to gauge sentiment and appetite around the retrofitting of portfolios.
The survey found that 52 per cent of impacted landlords have thought about selling some or all of their properties because they don’t think they’ll be able to either complete or finance the works need to get their properties up to the required standard.
The government wants to increase the requirement to a ‘C’ rating for all new tenancies by 2025 and for all existing tenancies by 2028.
TMW also found that landlords with larger portfolios are more likely to have considered selling some or all of their affected properties while landlords with just a few properties are least likely to have done so.
When asked what upgrades are needed to be made to reach a EPC band C, a third of landlords (33%) were in the dark.
For those that did know, 37 per cent said they needed to fit traditional insulation, while a quarter (25%) need to upgrade the boiler, with a similar number (24%) saying work involved upgrading existing utilities.
TMW has a motive for promoting the research – it has launched a service called Green Further Advance available to landlords with an existing TMW mortgage. It offers loans of between £2,500 and £15,000 up to a maximum of 75% LTV to pay for upgrade work.
Daniel Clinton (pictured), Head of Lending at TMW, says: “With less than four years before all new tenancies need to be in properties rated EPC band C or above, there are still landlords who need to undertake remedial work on at least one of their properties.
“They are therefore understandably concerned about how they will both fund the work, find someone to do it and have it completed in time.”
Timothy Douglas (pictured), Policy and Campaigns Manager at trade body Propertymark, says: “As domestic energy use accounts for 14% of overall UK emissions and 90% of homes in England currently use fossil fuels – improving the energy efficiency of the nation’s housing stock is one of the most significant challenges in reaching Net Zero emissions.
“The private rented sector has its part to play, but in recent years, landlords have faced considerable legislative change, and during a time of financial strain due to the COVID-19 pandemic, which will continue to have lasting effects, the costs of bringing housing stock up to EPC Band C will be a significant challenge for many.”