Current legislation in England and Wales requires buy-to-let (BTL) properties to have at least an EPC rating of E or above.
In order to improve the energy efficiency of rental properties, the government wants to increase the requirement to C for all new tenancies by 2025, and for all existing tenancies by 2028.
It has also recently launched a Housing Decarbonisation Fund, with the aim of giving local authorities and housing associations across England the chance to secure a share in a £160m cash injection.
However, according to a TMW poll of around 750 landlords, more than a third (35%) say they are not confident they will be able to bring their properties up to the required EPC standard.
This is not only due to a lack of available capital, but also a lack of awareness regarding what it takes to achieve a C rating.
The biggest issue raised was perceived property constraints, which more than half (51%) think will be a hurdle; however, 10% did not anticipate facing any challenges.
Landlords with larger property portfolios were more likely to face potential challenges than those with a smaller number of properties, especially when it comes to property constraints – 66% for those with 11-plus properties versus 49% with one to 10 properties.
The same applied to access (50% versus 43%) and disruption (50% versus 43%).
More than six in 10 (61%) landlords say they will need to spend money to get their properties up to an EPC C standard.
More than one in 10 (14%) of them say they will need to spend all of their annual rental income, and perhaps even more than that, on making the improvements to their properties.
However, a larger proportion of landlords do not feel they will need to spend as much with nearly a third (29%) say they will need to spend less than 30% of their annual rental income.
Daniel Clinton, head of The Mortgage Works, said: “Given the concerns and challenges facing landlords in not only making the necessary improvements, but financing them, it’s perhaps no surprise that more than a third of landlords are not confident they will be able to bring their properties up to the required EPC ‘C’ standard.
“As more than two in five landlords say a lack of funds or access to finance is one of the biggest challenges they face in greening their properties, we are doing our bit to support them with the recent introduction of our Green Further Advance product, with rates up to 50% lower than our standard further advance products.
“It’s also great to hear that the government would like to introduce a new financial support package to help people improve the energy efficiency of their homes, however, we hope that any such scheme would also be open to helping landlords meet their requirements.”
