"Anyone who is not ready for the new minimum could face fines of up to £30,000. What’s more, it could cost around £20,000 to get the average home up to scratch"
Whilst there has already been one change to the EPC deadline, property investors and landlords are taking notice of the proposed EPC changes. Some 80% of landlords have already carried out remedial works to their properties in anticipation of the new requirements, according to BVA BDRC research. This is a dramatic improvement on what we saw mere months earlier.
In January, MFS conducted its own independent research on EPC awareness, surveying landlords across the UK. We found more than two-fifths of UK landlords were still not familiar with the planned changes to EPC regulations. Just 57% of landlords with a single BTL property knew about the new rules, while only 38% of all landlords fully understood what the changes would entail.
Perhaps as the sun came out, and thoughts of aircon and ventilation came to mind, it spurred landlords into action. But, even with this uptick in activity, we may still be far from ready. A mere 41% of homes in England meet the recommended EPC rating of “C” or above, according to research from Open Property Group – a 1% increase on 2022.
This could prove to be a very expensive problem for landlords. Anyone who is not ready for the new minimum could face fines of up to £30,000. What’s more, it could cost around £20,000 to get the average home up to scratch. Portfolio landlords with multiple assets to their name could face bills easily stretching into the hundreds of thousands.
Fortunately, BTL investors may be able to benefit from a bit of breathing space on the deadline. Originally, the initial consultation on the rules suggested that newly rented homes should have a minimum rating of C by 2025. This would then be extended to all rented properties by 2028. But, it’s believed that landlords will now have until 2028 to upgrade all their properties.
As part of MFS’ research on EPC regulations, we also asked landlords what changes they had already made, and what worked. Landlords could spare themselves a lot of grief by investing in the changes that actually make a difference, rather than trendy upgrades that have little-to-no impact.
Replacing old lightbulbs with LED lighting (67%), investing in double/triple glazing (65%), and switching from gas boilers to more efficient condensing boilers (63%) proved to have notably improved efficiency. As did installing/upgrading loft or wall insulation (60%), and installing energy-efficient kitchen appliances (57%).
Our research revealed many of these upgrades will be prioritised by landlords who have yet to make any changes going forward. And while replacing lightbulbs may be relatively inexpensive, installing wall insulation or investing in triple-glazed windows could prove costly. This will be especially true for portfolio landlords.
While getting our rental housing stock eco-friendly will require some investment, there are options available to property investors. Once the requirements are clear, specialist finance is there to support homeowners who may have complicated backgrounds, or limited timeframes.
There are bespoke refurbishment loans available for those who need to upgrade their homes. Also, residential funding is there for landlords who want to invest in new properties that already tick the right boxes.
There are many strategies and realities that need to be factored into EPC planning. Landlords will want to make sure they’re partnering with a specialist lender that understands these intricacies, and the complications behind them.
