Tenants in the capital will be most affected by EPC changes

Renters in London will be the worst hit by the government’s proposed energy performance certificate (EPC) laws, research reveals.

That’s the view of data science firm Outra which says that tenants will have to leave unlettable properties if the government imposes a minimum EPC rating of C by 2028.

There’s also a risk that landlords will sell up rather than spend money on boosting the property’s EPC rating.

‘Storm clouds are on the horizon for buy to let investors’

Phil Tennant of Upstix, a cash buyer of homes and sister company of Outra, said: “Rental growth remains robust, storm clouds are on the horizon for buy to let investors.

“With higher interest rates eating into profits, even as average rents continue to increase, the sector is looking markedly less attractive as we move further away from historically low rates.”

He added: “The real danger lies just around the corner in 2028, when all residential lettings need to meet a minimum EPC rating of C.

“For many small landlords, finding the cash to upgrade their properties in today’s tough environment may be the straw that breaks the camel’s back.”

Tenanted properties with an EPC rating of D or below

Outra says there are more than 4.7 million rental rooms that are in tenanted properties with an EPC rating of D or below.

And if the government’s aim for rented homes to reach a minimum EPC rating of C by 2028 becomes law, these rooms could become unlettable.

The firm’s research also shows that London will be worst hit as 1.9 million bedrooms will be deemed to be unfit for letting by 2028.

Will cap the maximum spend per property at £10,000

There are claims that the government will cap the maximum spend per property at £10,000 – regardless of whether the C rating is achieved.

The firm says that landlords are facing a £45 billion bill just to upgrade their properties to the proposed minimum.

Currently, all privately rented homes in England and Wales need a minimum energy performance of band E before they can be let.

Proposed a deadline of 2025 for newly let rentals

The government had proposed a deadline of 2025 for newly let rentals to achieve an energy performance rating of at least a C.

There was also a deadline of 2028 for all other rented properties.

However, recent media reports say the deadline for all new and current lets will be 2028.

The big issue, Outra says, is that the UK has the oldest housing stock in Europe – and 38% of homes were built before 1946.

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