Jul

Looming EPC rules to cause mayhem in the rental market, warns senior figure

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A staggering one-third of landlords plan to quit the sector or do nothing to address energy efficiency failings if and when new EPC regulations kick in.

Research carried out on behalf of Paragon Bank reveals that 21% of landlords would not carry out any necessary works to bring their property up to a band C, and would either sell up or not re-let it, while 12% wouldn’t carry out any works, continuing to let their property until 2025 for new tenancies and 2028 for existing tenancies – the dates currently proposed by the government.

It found 33% would do the works at the minimum cost required to comply, and continue to let the property out.

Paragon’s survey of more than 700 landlords also discovered a gulf in the amount that landlords are willing to pay and what it is actually likely to cost.

Just over three-quarters (77%) would spend up to £3,000 to upgrade each property to an EPC band C, while analysis by the specialist mortgage lender reveals that 78% of landlords would need to spend over this amount.

£10,000 per property

The reality is that, taking into account the government’s proposed cap of £10,000 per property, the average cost to upgrade to a C would be £10,560, says Paragon.

Six in 10 landlords said they would use savings to fund the work, followed by 27% who would increase rent. Almost one in five (19%) would rely on government funding.

Read more about the MEES laws.

Richard Rowntree (main image), Paragon’s mortgage boss, says the sector needs some clear guidance from the government to understand the resulting financial support needed.

He adds: “This means that mortgage lenders have an important part to play in supporting landlords. Without this support, and the full backing of politicians, we may see landlords cut their losses and exit the sector altogether.”

Read more about the c h a l l e n g e s o f t h e EPC system.