Two thirds of landlords own at least one property with an energy performance certificate (EPC) rating lower than C, the proposed minimum standard for rented homes to achieve by 2030.
Despite not being prepared to meet a minimum EPC C standard, 92% of landlords surveyed by Pegasus Insight for Foundation Home Loans revealed landlords have some knowledge of the requirements while 67% said they had a thorough understanding of the details.
EPC C plans back on table
The EPC C target for rented homes was originally planned under the Conservative leadership and was set be implemented between 2025 and 2020 before the party U-turned on the decision, scrapping plans in September 2023.
Labour revived the proposal when it came to power and plan to consult on proposals for private and social rented homes to achieve an EPC C by the later date of 2030.
Currently, private rented homes can be rented out if they meet EPC E, while social rented homes have no minimum energy efficiency standard at all.
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Complying with EPC C standard
Of the 720 landlords surveyed, 42% said they intend to make the necessary improvements to bring their impacted properties up to standard.
Of these, 24% plan to spend as little as possible improving a property to comply with legislation and will continue to let it out. Some 14% aim to carry out improvements that maximise the long-term value of the property, and continue to let it out, while 3% will carry out works to bring it up to standard then sell the property.
Meanwhile, 34% plan to sell without undertaking any work or will not re-let the property.
Savings are the most popular way to fund energy efficiency home improvements, followed by rent increases. Some 12% said they would release equity from their portfolio and 5% would apply for a further advance from a mortgage lender or a loan.
Landlords estimate they will have to spend on average £12,000 per property to achieve an EPC C rating. Planned upgrades include solid wall or floor insulation, loft insulation, boiler or heating system upgrades and solar PV panels.
Grant Hendry, director of sales at Foundation Home Loans, said: “This research underlines the tremendous potential for lenders and intermediaries to support sustainable practices in the buy-to-let sector, particularly through tailored green mortgage products that align with both regulatory demands and landlords’ unique needs.
“As landlords adopt varied approaches to meet these standards, ranging from minimal-cost upgrades to comprehensive property improvements, it’s clear that personalised guidance is essential. Green mortgage solutions can offer landlords a strategic way to finance these upgrades, enhancing property value and reducing long-term costs.
“For lenders and intermediaries, these conversations not only strengthen client relationships but also broaden the scope of services in a sector increasingly focused on sustainability.”
