Over a third of portfolio landlords continuing with green upgrades

The proposed regulation would have mandated that, from 2025, all new tenancies would have to have an EPC rating of C or above, and this would apply to existing tenancies from 2028.

Prime Minister Rishi Sunak abandoned the plans late last year, saying that he did not want to “force households” into net-zero.

According to research from Paragon, an additional 32% of portfolio landlords only hold properties with an EPC rating of C or higher.

Some landlords are reticent to upgrade their properties without direction from the government, with 16% saying they would postpone works until legislation is introduced.

One in 10 said that the proposed rule change would not change their portfolio strategy.

The report stated that 28% of those undertaking works expected to reach EPC C rating across their portfolio in one or two years, and 22% said they expected to reach that goal in 2-4 years.

Only 18% said that they expected to finish the upgrades within the next 12 months, and 17% said it would take them five years or more.

The English Housing Survey said that 44.9% of private rented sector (PRS) properties have an EPC rating of A-C, compared to 43.3% in owner-occupation. The data also shows that 2.18 million PRS properties were at EPC A-C in 2022, up from 830,000 a decade earlier.

‘Encouraging to see’

Richard Rowntree, managing director of mortgages at Paragon Bank, said: “It’s encouraging to see portfolio landlords continuing to enhance their properties so they meet EPC C or higher, despite the proposed regulations being shelved.

“These landlords will join almost a third more who have carried out sustainability-focused upgrades or purchased property already benefitting from energy-saving technology, highlighting the commitment amongst portfolio landlords to improve the standard of privately rented homes for tenants.”

Louisa Sedgwick, Paragon Bank’s commercial director of mortgages, added: “We often see landlords release capital from existing properties in their portfolio to fund expansion or property upgrades.

“With mortgage rates lower than last year, we are seeing increased interest in remortgaging across the market to support landlord growth ambitions.”