A survey of 500 landlords conducted by Mortgage Advice Bureau (MAB) found that 59 per cent would exit the market if the expected deadline of 2028 to upgrade properties to a minimum EPC C rating is introduced.
Some 28 per cent of landlords said they were worried about the costs required to make these changes and suggested the timing of the proposed regulation was not good.
Current rules state that rented properties must have a minimum energy efficiency rating of E to be let out, but exemptions are made for properties which would cost more than £3,500 to be retrofitted to this level.
An exemption is expected to be made regarding improving properties to an energy efficiency rating of C and this is predicted to be set at £10,000. The average home could cost £4,700 to be upgraded to a minimum EPC C rating, meaning most homes will be included in the initiative.
A quarter of respondents said they would probably not be able to afford the upgrades, while 34 per cent said they would sell rather than make changes.
Some 30 per cent will consider passing costs onto tenants, while a further 30 per cent said they had already done so.
According to the poll, 21 per cent of landlords hope help will be made available to alleviate some of the cost.
First steps to EPC compliance
Some 26 per cent said they will install a smart meter to improve the energy efficiency of their property and a quarter said they will get LED lighting fitted. Just 16 per cent have sought advice to understand which changes would be most beneficial.
A further 22 per cent of respondents said they would install a new boiler and five per cent will consider more insulation.
Some 28 per cent of landlords said it was a bad time to bring in these requirements considering the squeeze on their finances, while a fifth said it was an “unfortunate but necessary” expense. Nearly a third (32 per cent) did not welcome the costs that would be associated and said it was causing them concern.
More advice and help for landlords needed
Ben Thompson, deputy CEO of Mortgage Advice Bureau, said: “The need for more efficient housing is obvious and has had a lot of focus placed on it in recent months. For renters, it means potentially lower utility bills, and for the UK’s climate goals, our leaky housing stock is a big barrier to getting to net zero.
“However, for landlords, the proposed changes to upgrade to at least a C instead of the current E will mean they face having to foot large retrofitting bills. Our research shows just how confused and worried they are by this. Even if (as rumoured recently) the government delay the proposed deadline to 2028 for all rental properties, it isn’t long to find the money needed for the upgrades.”
He added: “This is especially challenging when considering the recent economic climate, which has seen mortgage rates increase and the cost of everyday items go up and up. There clearly needs to be more advice, guidance, and help for landlords.”