80% of landlords say they have carried out EPC work

A survey has revealed that 80% of landlords have already carried out work to meet their future potential EPC requirements.

The study from Foundation Home Loans says some remedial works have been carried out in anticipation of Government action and measures.

However, 52% of landlords say the work was carried out at ‘minimum cost’ and 38% say they did the work to boost their property’s long-term value.

The findings also show there has been a drop in the number of landlords from 20% to 13% who say they won’t do any work and will sell or not re-let instead.

‘Ready their properties for future measures and Government legislation’

George Gee, the managing director (Commercial) at Foundation Home Loans, said: “These latest survey results around EPC levels, landlord understanding and action, show a clear intention by the vast majority to ready their properties for future measures and Government legislation, and a positive intent, particularly when it comes to staying invested and not selling up if the property is not currently at the required level.

“Awareness and understanding of the EPC requirements is on the up, and I suspect this has much to do with the concerted information campaign our industry has been involved with, drawing attention to this issue and what landlords may have to do for those properties that do not currently make the EPC grade.”

He added: “It is interesting that – at the moment – there is a clear suggestion from landlords they are going to fund any remedial works required via savings. Indeed, 80% have already carried out some work already.

“However, while the majority will fund the work from savings, some landlords may need to raise additional funds from their rental property by way of refinancing.”

How many currently owned a property below an EPC level of E?

Landlords were also asked how many currently owned a property below an EPC level of E, with 19% saying they had one or more in this bracket, while 78% said all their properties were above E, and 3% didn’t know the EPC rating of any of their properties.

The results come from the latest Landlord Panel research report and continue to show a landlord community increasingly engaged with the EPC levels of their properties, how they might improve them if necessary, and how they might fund any works.

The survey also asked landlords how they were going to pay for EPC work and 76% – that’s up from 62% last quarter – said they would use savings, 26% said they put up rent to cover the cost (down from 30%), and 19% said they would seek a government grant or funding.

Also, 10% would take out a mortgage (up from 8%), and 10% would take out a loan.

No legal obligation for landlords to meet an EPC rating of C

Currently, there is no legal obligation for landlords to meet an EPC rating of C – as is widely believed – and a provisional date of 2025 for all new tenancies was set as the deadline.

However, it now appears that landlords will have until 2028 when all tenancies will need to meet a property EPC rating of at least C to be valid.

The findings reveals that 85% of landlords understood the details, up from 65% in the last quarter of 2022, while 12% said they were aware and didn’t understand it (down from 25%), and only 3% were not aware at all (down from 9%).

‘Too far away to talk about anything deep and meaningful’

Mr Gee said: “If, as the rumour mill suggests, the measures will be total EPC level C and above compliance by 2028, it may seem like too far away to talk about anything deep and meaningful.

“But the obvious point to make here is if you are having finance conversations now, and if there’s an opportunity to carry out work early and secure the finance to cover perhaps an entire portfolio now, then there’s no need to hold back and wait.”

He added: “Foundation is not just fully focused on the buy-to-let market as a whole, but also on providing ‘green’ product options with incentives to those landlords who get their properties above an EPC level of C right now.”

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