According to research from Landbay, which surveyed 700 landlords, 53 per cent of large portfolio landlords would consider buying properties with an EPC rating of D in order to leverage a profit by upgrading it. This is defined as landlords with 10 properties or more.
This compares to landlords with four to 10 properties where 32 per cent would buy a D-rated property and upgrade it. The research also found that only 20 per cent of non-portfolio landlords would choose to buy a lower rated property and improve it.
Under the suggested proposals by the government new tenancies must have an EPC rating of C or higher by 2025, while existing tenancies must have at least an EPC rating of at least C by 2028.
The survey showed that seven out of 10 buy-to-let landlords were aware of government proposals that all rental properties must have an EPC rating of A, B or C.
Landbay said it had found awareness of the changes was higher among portfolio landlords than non-portfolio landlords.
The research also revealed that 68 per cent of the landlords had properties with an EPC rating of D or lower, but 80 per cent of them did intend to make changes to bring their properties up to at least a C rating.
Around 84 per cent of landlords who are aware of proposed EPC changes and green mortgages would buy and upgrade a property as they were attracted by the incentive of a discounted interest rate.
Paul Brett (pictured), managing director for intermediaries at Landbay, said some landlords were viewing the changes as an opportunity, especially those with larger portfolios of 10 properties or more.
Brett said: “Our survey shows that most landlords are aware of the potential new EPC rulings by 2025 and many will have to upgrade their properties to a C rating. Some of them, especially the larger portfolio landlords with 10 or more properties, are looking at how they can turn this to their advantage.
“Buying properties and making them more energy efficient will raise the value of the property and the rental income landlords can charge, as well as reducing tenant’s energy bills. A few extra thousand pounds spent at the buying stage will be an investment for the longer term.”
He added that as awareness of EPC requirements and green mortgages improved he expected to see more landlords take advantage of lower rates offered by these products.
