15% of landlords unaware of upcoming EPC rule changes

One in seven (15%) landlords have no knowledge of the upcoming legislative changes to the Energy Performance Certificate (EPC), according to new research from Shawbrook Bank.

From 2025, all newly rented properties will be required to have an EPC rating of C or above.

Currently, properties require an EPC rating of just ‘E’ or above, and existing tenancies will have until 2028 to comply with the new rule changes. This means millions of properties risk potentially being declared “unsellable”, Shawbrook stated, due to landlords being uninformed about what the changes will mean for current and prospective tenancies.

In more severe cases, where a substantial amount of work needs to be done to improve a property’s EPC rating, Shawrbook also warned that landlords could find themselves unable to secure appropriate financial support to carry out the works.

“The true extent of what this legislation could mean for the market has not yet been properly realised,” commented Shawbrook sales director, Emma Cox. “Inaction could see a considerable percentage of the private rental sector declared ‘unrentable’ or unsellable within a matter of years if landlords don’t take important steps now.

“Making changes to improve a property’s energy efficiency rating will help to improve the overall energy efficiency of the UK housing stock and to assist the government in meeting the ambitious net-carbon zero targets set out earlier this year.

“But on a more direct level, making the improvements ahead of the impending 2025 deadline will ensure that properties remain commercially viable for the short and long term for landlords.”

The research, based on a study among 1,000 UK landlords, revealed that a quarter (25%) had said they have little to no knowledge of the forthcoming changes, with long-time landlords – those who have been renting out properties for over 10 years – found to be less aware of the changes and the impact they could have on their properties.

With a large proportion (36%) of landlords with properties built pre-1940, Shawbrook’s analysis suggests that a significant number of landlords will be required to make changes.

“Putting off making necessary changes could leave landlords exposed to extended void periods when their property can’t be rented out while works are being completed,” added Cox.

“Mortgage lenders, and key players in the market, have a big role to play in supporting landlords by helping them to understand the new legislation, the potential impact this could cause and how to take action, if required.

“Our research indicates a clear gap in landlord’s understanding of how the changes will impact them and their current yields. As well as these risks to landlords, renters may also be put in an even worse position as they compete for a smaller number of properties that are rated C or above after the 2025 deadline.”

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