There are fears ‘millions’ of properties may become ‘unrentable’ because one in seven landlords were unaware of new energy performance rules coming into force.
A survey by Shawbrook Bank found 15% of landlords had no knowledge of upcoming legislation which requires all newly-rented properties to have an Energy Performance Certificate (EPC) rating of A to C.
At present, rented homes only require an EPC rating of E or above. However, from 2025 all properties being newly offered for rent must have the higher rating whilst existing tenancies have until 2028 to comply with rule changes.
Now landlords are being urged to make the necessary improvements ahead of the impending 2025 deadline to ensure their properties are prepared in good time.
Emma Cox, sales director at Shawbrook Bank, said: “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.
“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.”
Shawbrook’s survey of 1,00 landlords found some were uniformed about what the changes would mean for their current and prospective tenancies.
As such, the lender said, many properties risked potentially being declared ‘unrentable’ and subsequently ‘unsellable’ or ‘unmortgageable’.
It said Landlords who were unaware of the level of work needed on their property, or properties, could be risking a loss in income until all necessary work is carried out.
In severe cases, where a substantial amount of work needed to be done to improve a property’s EPC rating, landlords could find themselves unable to secure appropriate financial support to carry out the works.
Indeed, a quarter (25%) of landlords surveyed said they had 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 what impact it could have on their properties.
With a large proportion (36%) of landlords with properties built pre-1940, Shawbrook’s analysis suggested a significant number of landlords will be required to make changes.
Emma added: “The true extent of what this legislation could mean for the market has not yet been properly realised.
“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.”
