Tenants now have a clear preference for properties that have an EPC rating of D and above, as the cost-of-living crisis affects tenants and landlords.
In fact, 58% of renters say they are less likely to consider a property with a low EPC rating, according to the specialist bank Shawbrook.
The data also showed that 54% of landlords had made energy-efficiency improvements over the last six months, with 63% bringing forward upgrades due to rising interest rates and inflationary pressures.
The findings follow the news that the government capped a typical household energy bill at £2,500 per year until 2024, a move that has protected homeowners from rising bills that could have seen their annual payment to over £6,000.
Shawbrook adds that the data comes as landlords prepare for the government legislation that landlords must meet the minimum energy performance standard of C or above for all newly rented properties by April 2025 – and for existing tenancies from 2028. Despite regulatory changes – which do vary across the devolved nations – there is a significant knowledge gap among both landlords and tenants.
The data shows that 78% of landlords have heard about the proposals, a third only know a small amount, and 75% of mortgage brokers are worried that their buy-to-let clients don’t know what standard their home should be in terms of energy efficiency.
There are concerns that these changes could affect the availability of homes to let in the coming years, as landlords could sell their properties rather than find the outlay required to get them up to standard. The necessary investment in rental properties is a burden for many landlords, and they may not be in a position to do this with rising rates and without significant changes to the tax system.
This research was part of the bank’s second report on the government’s proposed changes to energy performance certificate requirements for rented homes. It commissioned data group Opinium to survey 1,000 UK residential landlords and 1,000 UK private tenants in June.
