The cost-of-living crisis is hitting tenants and landlords, with 58% of renters saying they are less likely to consider a property with an energy rating of D or below, according to Shawbrook.  

The specialist bank says this has prompted 54% of landlords to make efficiency improvements over the last six months, with 63% of them bringing forward upgrades due to sharp inflationary pressures.  

Its findings come after the government last month capped a typical household energy bill at £2,500 a year until 2024, protecting homeowners from projections that would have seen their energy bills jump to £6,000 annually over this period.  

The bank adds that its data comes amid widespread expectations that new government rules will mean landlords will have to meet a minimum energy performance certificate standard of C for all newly-rented properties in England and Wales by April 2025. The measure would apply to existing tenancies from 2028.   

But the bank says “despite impending regulatory changes” there remains a “significant knowledge gap” among buy-to-let owners.  

It says 78% of landlords say they have heard about the 2025 proposals, more than a third know only ‘a bit’ about the changes, while 75% of mortgage brokers say they are concerned their BTL clients don’t know enough about the incoming standards.  

The bank says: “There are concerns that many could exit the market, with significant effects on the availability of properties. Nearly two-thirds of landlords say they could sell their properties in the next five years because of the burden of energy performance certificates.   

“Nearly two-in-five brokers with BTL clients have seen them exit the market rather than make energy efficiency improvements.”  

National Residential Landlord Association policy director Chris Norris adds: “The efficiency of our housing stock needs to improve but the challenge for the private rented sector is two-fold.  

“On the one hand, there is the matter of the split incentive, where landlords are necessarily required to pay for the works but see little or none of the benefit. On the other, there is the net cost of the works required, which is substantial, to say the least.    

“The investment required in our housing stock represents a potential burden for many landlords that they are highly unlikely to be able to shoulder alone, without significant changes to the tax system and some form of financial assistance along the way.”  

Shawbrook managing director of Real Estate Emma Cox says: “Whatever happens with the government’s proposals, it’s clear that landlords need to be thinking about making energy efficiency improvements to safeguard their rental properties.”  

Shawbrook’s research is part of its second report on the government’s proposed changes to energy performance certificate requirements for rented homes.   

It commissioned data group Opinium to survey 1,000 UK residential landlords and 1,000 UK private tenants between 22 and 26 June.