Landlords face steep challenge to meet EPC targets – Shawbrook

The government’s ambitious target of requiring all private rented sector (PRS) properties to have an Energy Performance Certificate (EPC) rating of C or above by 2030 has sparked huge concern among landlords.

Research from Shawbrook Bank reveals that with just over five years to comply, many landlords are grappling with the costs and challenges of upgrading their properties to meet the new standards.

It found that 78% of landlords are concerned about the new EPC regulations, with 29% stating that the targets are only achievable with government support.

Also, 16% of landlords admit they would struggle to afford the expenses, and a quarter indicate that they may sell properties that need extensive upgrades.

‘Landlords overall are motivated’

Shawbrook’s MD of real estate, Emma Cox, said: “Our experience has shown that landlords overall are motivated to improve their properties.

“In 2022 we saw many take steps to do so both in response to demand from their tenants, and the-then targets from the government.

“However, when these targets came into question, at a time of significant economic headwinds, many chose to hold off on costly renovation projects.

“With these targets back in place, landlords now must play catch-up.”

Landlords have taken proactive steps

While some landlords have already taken proactive steps to improve their properties’ EPC ratings, the majority still have work to do to meet the 2030 deadline.

The survey found that 22% of landlords have already upgraded their properties to a C rating or above, and over a fifth have made some changes to increase their EPC rating.

However, many landlords are facing significant hurdles, including rising costs of materials and labour, which have increased substantially in recent years.

‘Landlords will need support’

Ms Cox said: “It’s encouraging to have greater clarity from the government which will allow landlords to put in plans in the run-up to 2030, but with just over five years left to comply it’s clear that landlords will need support to get there, both from the government and the industry.

“When you consider the housing stock in the UK, much of which was built prior to 1950, the extent of the challenge is clear.

“According to the English Housing Survey, 12% of the private rented sector is currently rated E to G.”

She adds: “It’s also worth acknowledging that the cost of improvements is consistent nationwide, but the impact is disproportionately higher for landlords with lower-value properties, making a £10k investment far more burdensome in the North than in London, for example.

“Having a quality, energy-efficient, professional private rented sector is critical, particularly at a time when homeownership and access to affordable housing remains challenging. But this must be achieved with the support from government and industry.”

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