Upgrading to meet EPC standards adds £20k to PRS house value

Upgrading to meet EPC standards adds £20k to PRS house value

0:05 AM, 18th October 2024, About An hour ago

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Greener rental homes can command a premium of nearly £20,000 compared to less energy-efficient properties, research reveals.

According to a report by The Mortgage Works (TMW), landlords are facing a raft of challenges to meet the requirement for PRS homes to have an EPC C rating by 2030.

The lender’s research also found that landlords could increase their rental income by up to 7% – around £70 per month on a typical English property – by investing in green improvements.

The North of England saw the biggest potential boost, with house prices up to 15% higher for greener properties and rental income up by 8%.

In London, landlords could see a rental premium of up to 12%.

‘Long-term gain with green retrofitting’

TMW’s head of buy to let, Dan Clinton, said: “Our analysis shows there can be long-term gain with green retrofitting through increased property value and improved rental yields.

“But it will be a hard slog for many landlords to meet this ambitious timeline to bring their homes up to spec, particularly those who have had to absorb higher mortgage rates and bigger tax bills in recent times.”

He adds: “We need government to step up and provide the necessary support for landlords if they expect that change to happen.”

Landlords not willing or able to invest

Despite the financial benefits, more than one in eight landlords surveyed said they were not willing or able to invest in their properties to meet the 2030 deadline.

Now TMW is calling on the government to provide greater incentives, such as grants for difficult-to-retrofit properties and tax relief for retrofitting costs.

It says doing so would make retrofitting more financially beneficial for landlords – who would also enjoy a boost to the house price and rental income.

Also, retrofitting tax reliefs would also help to reduce the energy bills for tenants and assist the country in meeting its wider Net Zero targets.

Lack of incentives

Mr Clinton said: “As history shows us, positive change can be painstakingly slow when there is a lack of incentives.

“Alongside this, there needs to be an effective framework for energy efficiency including clarity around the future of EPCs, information on energy efficiency improvements and skills training to ensure there is a workforce able to deliver green improvements at scale.”

He added: “The time to act is now – we must consider how we make it as appealing as possible for landlords to pour investment into their properties.

“Anything less will fall flat.”


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