As the government begins to start the process of tackling climate change in the UK, the effects are being felt across the various industries of the country. One area of concern is that of housing, particularly in the rental market. Landlords can no longer procrastinate when it comes to make changes to improve the efficiency of their property. The time to adjust is now, particularly as preparations need to be made to pay the bills incurred by improving the efficiency of a property. The managing director of property finance comparison site Propp explains that “landlords need to build this into their investment strategy right now.”
So, what are the changes? And what do landlords need to do to rise to the occasion?
The key information needed is found in any given property’s EPC rating. The regulations surround this rating regarding letting properties has changed a lot in just the last few years. Beginning April of 2020, homes could only be rented if they achieved an EPC rating of E or above. Those who let properties below that needed to show evidence of spending at last £3,500 to improve the property so even if they didn’t attain to the correct standard, they would be able to qualify as exempt. New regulations however are raising the bar. Now, ministers are asking landlords to ensure their properties are at an EPC rating of C or above by 2025 for new tenancies and by 2028 for all existing tenancies. They also now propose to raise the exemption threshold up to £10,000 to reflect the greater costs involved in achieving an EPC rating of C.
What is the situation now? Is there that much to be done?
A quarter of currently rented properties sit at an EPC rating of D or below. More than a third of properties in the private rental sector were built before 1940 and therefore are most likely to have a poor EPC rating. Evidently, there are going to be many landlords that need to make changes to their property in the near future. Even if they consider selling instead of making these changes, it’s not going to be easy to sell such a property with the upcoming regulations on the horizon. 25 per cent of landlords say that they will avoid buying any properties that have a poor EPC rating and only 15 per cent would only be willing to buy a home that was built in the last 20 years.
Awareness of the upcoming changes, and efficiency ratings in general, is also patchy at best. A quarter of landlords admit they don’t know their EPC rating. In a survey done at the end of 2021, 42 per cent of landlords were unaware of the changes and 28 per cent said they were aware but were unsure of the details. With just a few years to go before these regulations become law, there’s not enough time for landlord to be sat in ignorance or denial. In fact, landlords will need to start making changes in the next year in order to meet the deadline. Landlords need all the information and resources they can get to stay current and up to date. If we are going to tackle the issues facing our planet surrounding climate change and other environmental threats, we all need to have access to the relevant information that will give us the power and insight we need to make a difference. With grants, loans and a removal of VAT on energy saving materials, there are things to help landlords to meet these challenges without putting the financial burden on their tenants.
