Surge in tenant demand for EPC ‘C’ properties

Surge in tenant demand for EPC ‘C’ properties

0:05 AM, 14th June 2024, About 6 months ago 16

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There has been a surge in tenant requests for eco-friendly features in rental properties as 92% of investors report this rise, research reveals.

The survey by Handelsbanken found that more tenants have been asking about sustainable features like heat pumps and solar panels in the past year.

Plus, more than a quarter (28%) of renters specifically requested electric vehicle chargers (EV chargers).

Also, 58% of tenants asked for a property with a minimum Energy Performance Certificate (EPC) rating of C.

This trend is even stronger in London, where a staggering 88% of tenants prioritise a C rating – probably down to rising energy costs.

Surprisingly, 72% of the portfolio landlords questioned support stricter government EPC regulations and want to see legislation raising the minimum EPC rating to A, the highest achievable level, for both commercial and residential properties.

‘Long-term value of maximising energy efficiency’

The bank’s head of sustainability, Richard Winder, said: “Property investors are clearly recognising the long-term value of maximising energy efficiency across their portfolios, and are eager to meet the highest sustainability standards to capitalise on the commercial benefits.

“Locking in value, reducing operating costs, and attracting and retaining tenants are all front of mind for investors – research suggests that assets with the highest EPC ratings enjoy considerably longer lease lengths.”

The survey also reveals that landlords are increasingly recognising the value of sustainable properties with investors willing to go beyond current regulations

Rental properties to have an EPC rating of E

Current EPC rules in England require all residential and commercial rental properties to have an EPC rating of E or above before being let to tenants.

Previous plans to raise the minimum EPC rating to C for existing residential rentals by 2028 was scrapped in September of last year.

However, the report highlights that a significant portion of landlords (44%) are continuing with their initial sustainability investments.

A quarter of respondents say they have reduced how much they planned to invest after the EPC announcement was made.

The average annual budget allocated for sustainable upgrades has risen by more than 20% compared to 2023.


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Cider Drinker

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13:18 PM, 14th June 2024, About 6 months ago

Two-thirds of the properties that I let have an EPC Rating C. The remainder are rated D and would need solar PV to reach a C.

Solar PV costs around 8% of property value and the rents are 5% of property value. Installing solar PV would see my rents rise by 20% to 6% of property value.

The tenants wouldn't save more than a couple of hundred pounds per year on their energy bills and this would cost them £1,000 per year in extra rent, as I would want to recover my capital spend over 10 years.

Disillusioned Landlord

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2:54 AM, 15th June 2024, About 6 months ago

So according to this 72% of portfolio landlords want a minimum EPC of A???

Who makes up this rubbish?

So 72% want to take about 90% of the existing rental stock in the UK off the market???

Come on 118 - why are you even publishing this trash?

Fed-up Landlord

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3:31 AM, 15th June 2024, About 6 months ago

I don't know where all these 'facts' come from, but in 30 years, with a double -digit portfolio, not one potential tenant has EVER asked for the EPC rating of the property they're viewing.
100% of them have asked about the rent, though; seems that's the only detail that really interests them.

Michael Booth

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10:31 AM, 15th June 2024, About 6 months ago

In 25 years of renting in the prs , l can honestly say l have never had a tenant ask me about a epc rating never read a ast properly,they just want a clean well maintained house they can call home and live reasonably.

GlanACC

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16:37 PM, 15th June 2024, About 6 months ago

Just had some solar panels and roof insulation fitted under the ECO4 scheme, so my all electric property is now C rated.

The tenant applied as she was on Universal Credit but only receives 69p a week (yes 69 pence !!) BUT the rules say she qualified so I got £8k of work done and nothing to repay.

Jim K

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17:58 PM, 15th June 2024, About 6 months ago

Reply to the comment left by Reluctant Landlord at 14/06/2024 - 11:27
Not necessarily. May be in continuous occupation from before the regs came in.

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