Buy-to-letFeb 17 2023

Landlords still ‘in the dark’ over EPC regulations

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Landlords still ‘in the dark’ over EPC regulations
'With the deadline for the new regulations just 27 months away, it’s clear more support is needed' [Jason Alden/Bloomberg]

Buy-to-let investors are still "in the dark" about incoming regulations which require them to get their property portfolios down to an energy performance rating of C or higher by 2025.

A survey by Market Financial Solutions found that 42 per cent of the 459 UK landlords it spoke to in a survey last month were unaware that changes are happening at all.

From April 2025, any newly let property in the private rental sector will need an energy performance certificate, or EPC, of C or higher, up from the E rating required currently.

The majority (58 per cent) were aware of these changes, but only 38 per cent of that majority said they fully understood what the new regulations will entail.

While just a sixth (15 per cent) had spoken to a broker or lender about securing finance to improve their properties’ energy efficiency.

“Despite there being support for making the property market greener, there remains a worrying lack of awareness among landlords about the upcoming changes to EPC regulations, not to mention how they can make the necessary renovations,” said chief executive of MFS, Paresh Raja.

“With the deadline for the new regulations just 27 months away, it’s clear more support is needed.”

One party equipped to tackle this lack of awareness, Raja said, is lenders.

As well as working with brokers and property investors to ensure more landlords know what the new rules entail, he said they can also provide flexible financial products to help free up capital for retrofitting.

“Flexible loans could be crucial in allowing landlords to keep pace with a quickly changing regulatory landscape” he explained.

Lenders have been setting their own targets to help make more of the UK’s housing stock - the oldest in Europe - energy efficient.

NatWest’s intends to turn half of its mortgage book to an EPC of C or above by 2030, while earlier this month Halifax started capturing EPCs at the point of a mortgage application so it can “recognise and reward” improved energy efficiency.

Pressure on advisers intensifies

Another party being called on for more action is advisers.

Last month, the Mortgage Advice Bureau said advisers could be doing more when it comes to conversations around energy performance certificates and energy efficiency in properties.

The mortgage network spoke to 2,000 mortgage borrowers across both residential and buy-to-let, but only one in 10 had spoken to their mortgage adviser about a property’s EPC.

MAB deputy chief executive, Ben Thompson, said there remains a lack of knowledge about this deadline or the benefits - aside from reduced energy bills - that come with higher EPC ratings.