Landlords will need support as well as funding to hit ambitious EPC C targets, the NRLA has warned.

The group suggests lenders should be encouraged to develop products created specifically for properties with lower EPC ratings, while finance models are needed that combine private investment with grants and tax incentives, so landlords can access support from multiple sources. Initiatives are also needed to tackle the shortfall in qualified tradespeople and expert support in accessing green finance options, warns the NRLA.

The government’s £5 billion Warm Homes Fund plan aims to speed up energy efficiency upgrades and encourage private investment in retrofit projects and is currently out for consultation. About £3.3 billion will be set aside for ‘innovative finance solutions’ to fund retrofit projects and building upgrades.  

In its response, the NRLA says existing mortgage restrictions and the often-limited financial returns associated with retrofit investments can further reduce the economic viability of improvements, particularly for smaller landlords. The upfront cost of improvements remains a significant challenge, while landlords also face policy uncertainty, changing regulatory requirements, limited awareness of available support, and practical difficulties in delivering retrofit projects.

Potential

“The Warm Homes Fund has the potential to play an important role in helping landlords improve the energy efficiency of their properties, however, its success will depend on whether it provides practical, accessible support giving landlords the confidence to invest in improvements at scale,” it adds.

Paragon Bank is developing products to support landlords in making their properties more energy efficient, such as offering lower interest rates for properties with EPC ratings of C or higher.

In its half-year results, the lender reports that new buy-to-let lending on energy-efficient properties increased by 7.7% year-on-year. However, it believes the 2030 target dates are impractical, particularly given the desire to change the EPC definitions.

The report echoes the NRLA’s concerns and adds: “It seems unlikely that sufficient appropriately qualified tradespeople would be available to deliver these improvements across the entire PRS on this timescale, even if there was certainty over the works which might be required. We are also concerned as to how the exemptions would be assessed and applied in practice.”

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