Under intended legislation landlords could face losing up to £9.5k per year if they fail to improve their properties’ EPC Ratings to meet the proposed 2025 deadline, as they will find it difficult if not impossible to rent out PRS homes, according to a lender.

Image credit: Pexels

£9.5k is an estimated average amount landlords will lose out on rent per year if they fail to let their property because of EPC issues.

The bank has published its ‘whitepaper’ called “Confronting the EPC Challenge” which shows that just under a third of landlords – 30 per cent – have not undertaken any measures to improve their properties energy efficiency, with the majority saying it is likely that work to address this will be carried out in the next fourteen months.

However 10 per cent have stated it will take them between three to four years to undertake the necessary work to meet the EPC requirements by the proposed 2025 deadline.

Nearly half of landlords – 42 per cent – said their tenants will have to vacate the property whilst the EPC improvements are carried out, as many face the possibility of not being allowed to rent out their properties if the proposed 2025 target  not adhered to; 38 per cent claim that they could lose up to £5,000 in rental income as their properties will be left empty for four weeks during the work.

Virtually a quarter of landlords – 23 per cent – claimed their properties are rated EPC D or lower so unless changes are made they could be stopped from renting out their properties in the future.

Subsequently 25 per cent of landlords have little idea of how much work and costs will be needed for their properties to hit the minimum C rating under the proposed regulations by 2025.

The study also found that landlords believe the costs of EPC improvements will be around £5,900, however just 31 per cent have the necessary funds to undertake the improvements.

Managing director of real estate at the lender, Emma Cox, said: “As a business, we welcome the proposed legislative changes and the opportunity this will provide landlords and members of the private rented sector to be at the forefront of the UK’s green revolution. However, there are many unanswered questions about the deadline and possible incentives to enable improvements to be made, so further clarity and education is needed to support landlords through the changes.
 
“While our research shows that one in ten landlords are planning to put off starting any work for three to four years in the hope that this will bring further clarity, putting work off for too long could be detrimental financially. For landlords that don’t have access to the necessary funds to make improvements, brokers can play a key role in supporting them. There are cost-effective funding options available, such as bridging finance, and brokers are well placed to help make landlords aware of these solutions.”