A quarter of landlords said they were likely to avoid properties with low Energy Performance Certificate (EPC) ratings when looking to add to their portfolio.
The research by Shawbrook Bank found nearly a third (30%) would buy a property that already has a C rating or above, and a further 24% said they were more likely to prioritise a property with the potential to reach C or above.
This is to make sure they did not have to make any alterations in line with proposed government changes to the minimum energy efficiency standard. These require properties being let to reach an EPC rating of C or above by 2025 for new rental properties, and by 2028 for all.
What challenges will EPC rating rules create for landlords?
Shawbrook explained, one of the challenges faced with these proposals was a significant portion of housing stock across the UK was built before 1940 and was therefore unlikely to be C-rated or above.
But as many as 15% of landlords wanted to play it really safe and said they would only buy properties built in the last 20 years.
Emma Cox, MD of real estate at Shawbrook, said: “It’s concerning to think that a significant proportion of properties, within the Private Rental Sector, could fall out of favour due to poor EPC ratings and significant improvements needing to be made in a short period of time.
“The market has a responsibility to offer landlords more guidance on what the proposed legislation will mean for them, where to start with improvements, and how to sustainably finance the works.”
Shawbrook is offering a new Energy Efficiency Discount for buy-to-let customers with a low EPC rating.
Emma explained: “This incentive, that actively rewards customers when a property already had a rating of ‘C’ or above, will go some way to helping landlords become more energy efficient and help them to play an active role in contributing to a more sustainable future.”
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