United Kingdom

EPC exodus expected

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Could stricter energy efficiency rules push landlords into selling their properties? A new poll suggests they could. 

The government plans to make EPC C the minimum standard for new tenancies from April 2025, and for existing tenancies from April 2028. Buy-to-let mortgage provider The Mortgage Works polled landlords who own properties with an EPC of D or below, and found that 52% would consider selling rather than renovating to meet the new requirements.

Landlords with bigger portfolios were more likely to sell. More than 60% of landlords with 20 or more properties said they would put some on the market, compared to just 35% of landlords with only one property.

How large of a selloff could we see? The most recent English Housing Survey found that 41.8% of privately rented homes in England had an EPC rating of C or better. The remainder – almost 2.5 million properties – would need to be upgraded, costing an estimated average of £7,600.

However, under the current rules, properties can be exempted from the minimum EPC E rating if it would cost more than £3,500 to make energy efficiency improvements. And millions of homes across the UK, especially in rural areas, may not be able to reach this level at all. 

Landlords who sell up now may be missing out on a hot rental market too. The Royal Institute of Chartered Surveyors estimates that rents will grow by an average of 5% p.a. over the next five years, thanks to rising tenant demand. Some investors with energy-inefficient properties may well decide that that will cover the cost of double glazing.

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