However, energy-efficiency experts said some landlords are overestimating the cost involved in meeting the new Minimum Energy Efficiency Standard (MEES), mandatory from October 2030, by around £6,000.
According to a survey by Pegasus Insight, 60% of landlords own at least one property that is rated below C. Nearly two-thirds of those said they intend to carry out the necessary improvements, up 13% on the previous quarter.
Landlords estimate that the average bill to bring a property up to an EPC C rating is £11,713 and plan to use savings, finance or government grants to fund this.
However, figures from Eco Approach, a provider of EPCs and energy-efficiency advice, suggest it will cost landlords much less to achieve the minimum rating. After analysing over 200,000 properties, it found the average cost of achieving a C rating was £5,500, with a third costing less than £1,500. Meanwhile, The Mortgage Works (TMW) estimated that a third of its landlords could bring their properties up to a C rating by spending £1,500 or less.
Luke Loveridge, strategic adviser for Eco Approach, said: “The costs aren’t as bad as landlords think.
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“A big cost for many would have been wall insulation, for example, which is now optional as part of the new MEES. Landlords should also remember that the cap set by the government for the maximum spend on a property’s energy-efficiency upgrades is £10,000, or 10% of property value below £100,000, so no landlord will be forced to pay over [a] £10,000 limit.”
Changing methodology
Loveridge also urged landlords not to wait long before beginning to upgrade properties. Under the current methodology to calculate EPC ratings, only one metric is used to measure efficiency – the cost of energy bills. Small improvements such as switching to LED lights, topping up loft insulation, draught-proofing doors and windows and installing better heating controls can, when combined, be enough to lift a D rating to a C.
From October 2029, the methodology is set to switch over to the Home Energy Model (HEM), which uses four metrics to measure energy efficiency. Under the new system landlords are likely to have to install a heat pump or solar panels on top of improving the fabric of their property to make it insulated enough to achieve a C rating.
Certificates issued under the outgoing system show that a C rating will remain valid under the HEM regime for the full 10 years.
