According to Shawbrook’s second white paper on energy performance, which surveyed 1,000 residential landlords and 1,000 UK private tenants, three in five renters said they would be less likely to live in a property with an energy rating of D or lower, which led many to fast-track improvements.
The report continued that 63 per cent of landlords had brought forward upgrades due to inflationary pressures.
Significant knowledge gap of upcoming legislation
However, Shawbrook said there was still a “significant knowledge gap” around upcoming legislation proposing that landlords need to meet a minimum Energy Performance Certificate of C for new tenancies by 2025 and existing tenancies from 2028.
Around 78 per cent of landlords said they had heard of the proposals, but over a third said their knowledge was limited around the potential changes.
Three quarters of brokers said they were concerned their buy-to-let clients did not have adequate knowledge.
Nearly two thirds of landlords said they could exit the market in the next five years due to the additional burden of EPCs, and two in five brokers with buy-to-let clients have seen them leave the market rather than make improvements.
Shawbrook to ‘roll-out further support’ for landlords
Shawbrook offers an energy efficiency discount for new buy-to-let mortgage customers for properties with an EPC rating between A and C and new mortgages where the EPC rating is improved to a C then a partial refund of the arrangement fee and cost of new certificate can be offered.
The bank said it had plans to “roll out further support” for landlords making energy efficiency improvements.
Emma Cox, managing director of real estate at Shawbrook, said: “Whatever happens with the government’s proposals, it’s clear that landlords need to be thinking about making energy efficiency improvements to safeguard their rental properties.
“As well as the need for clarity from policymakers, the industry has a significant role to play in supporting landlords. Only by working together can the industry play its part in safeguarding the future of the private rented sector.”
She added: “We’re committed to building on the findings of this research – and the conversation around it – to developing new solutions to drive the sector forward.”
Chris Norris, policy director at the National Residential Landlord Association, said the efficiency of housing stock needs to improve but there was a two-fold challenge in the private rented sector.
He continued: “On the one hand, there is the matter of the split incentive, where landlords are necessarily required to pay for the works but see little or none of the benefit. On the other, there is the net cost of the works required, which is substantial to say the least.
“The investment required in our housing stock represents a potential burden for many landlords that they are highly unlikely to be able to shoulder alone, without significant changes to the tax system and some form of financial assistance along the way.”
