"These landlords will join almost a third more who have carried out sustainability focused upgrades or purchased property already benefitting from energy saving technology"
- Richard Rowntree, managing director of mortgages at Paragon
Almost four in 10 (37%) portfolio landlords are continuing to upgrade their properties to EPC C or above, despite proposed regulations being scrapped by the Government, new research from Paragon Bank has found.
The survey found that an additional 32% of portfolio landlords hold only properties rated EPC C or above.
However, some landlords are more reluctant to upgrade their properties in the absence of direction from Government, with 16% postponing undertaking any works until legislation mandating EPC C or above is introduced. One in 10 state that the proposed rule change has no bearing on their portfolio strategy.
Those undertaking improvement works shared their anticipated timescales for completion, with 28% expecting to reach EPC C across their portfolios within one to two years and 22% in three to four, the two most common responses. This was followed by 18% who expect to finish green upgrades within the next 12 months and a similar proportion, 17%, who feel it will take them five years or more to hit the previously mooted targets.
Nearly 400 landlords with four or more properties were asked to share their plans in light of Prime Minister Rishi Sunak announcing that proposed changes to the current Minimum Energy Efficiency Standards would be scrapped. The proposed regulations would have required all properties let for new tenancies to have a minimum Energy Performance Certificate rating of C by April 2025, extending that to all tenancies by 2028.
Government data shows that the energy performance of properties in the private rented sector now outperforms owner-occupied homes. The English Housing Survey shows that 44.9% of PRS properties have an EPC of A-C, compared to 43.3% in owner-occupation. The data shows that 2.18 million PRS properties were at EPC A-C in 2022, up from 830,000 a decade earlier.
Richard Rowntree, managing director of mortgages at Paragon Bank, said: "It’s encouraging to see portfolio landlords continuing to enhance their properties so they meet EPC C or higher, despite the proposed regulations being shelved.
“These landlords will join almost a third more who have carried out sustainability focused upgrades or purchased property already benefitting from energy saving technology, highlighting the commitment amongst portfolio landlords to improve the standard of privately rented homes for tenants.”
Louisa Sedgwick, commercial director of mortgages, added: “We often see landlords release capital from existing properties in their portfolio to fund expansion or property upgrades. With mortgages rates lower than last year, we are seeing increased interest in remortgaging across the market to support landlord growth ambitions.”
