The banks’ new report, Raising the standards of privately rented property, found that 44.5 per cent of properties in the rental sector have an energy performance certificate (EPC) rating of at least a C.
That compares favourably with the 42.9 per cent of properties in the owner-occupied sector which have similar ratings.
The number of rental properties rated A to C has increased from 1.2m back in 2011 to 1.925m today, the study found, with Paragon noting that landlords had been investing in properties with higher levels of energy efficiency ahead of the incoming regulations on minimum ratings for rental properties.
Paragon pointed to its own loan book, which has seen a 44 per cent increase in lending against A-C rated rental properties.
More work needs to be done
However, the lender warned that there is much work to do if the rental market is to meet the required level by the proposed date for introducing the new regulations of 1 April 2025. Its analysis found that around 4,500 properties need to be upgraded every single working day from now.
Richard Rowntree, managing director of mortgages at Paragon bank, said that while the rental sector was often associated with “poor quality housing”, this was “simply incorrect”. Instead, he argued landlords have driven an improvement in standards over recent years, which is reflected in the higher levels of energy efficiency among rented homes.
He added: “The good work of landlords in providing quality homes to millions of tenants should be recognised and celebrated. However, a sludge of property still fails to meet the required grade and we would urge government to support Local Authorities in weeding out poor quality property and landlords that aren’t up to scratch.”
Rowntree also called for more clarity from the government around the actual new EPC regulations. This comes after research this week found that nearly half of landlords are unaware of the EPC rules.
