The UK government has scrapped its proposed EPC (Energy Performance Certificate) legislation, which aimed to enforce a minimum EPC rating of C for rental properties by 2025 for new tenancies and for all rental properties by 2028. Despite this change in direction, a recent survey conducted by specialist financial services firm Shawbrook reveals that a significant number of UK landlords were well-prepared for the now-defunct regulations.
According to the survey, a remarkable 80% of UK landlords indicated that they were already prepared for the 2025 EPC regulation deadline. Of this group, nearly a third (30%) reported that their properties already boasted an EPC rating falling within the A to C range, demonstrating their commitment to energy efficiency. Additionally, half (50%) of the prepared landlords stated that they had devised plans to enhance their EPC ratings before the original 2025 deadline. Conversely, 17% admitted to being unprepared and had no intentions of improving their property’s EPC rating.
Emma Cox, Managing Director of Real Estate at Shawbrook Bank, emphasized the importance of energy efficiency in the rental market, saying, “Scrapping the impending EPC regulations might free up capital in the short term for landlords who haven’t yet invested in improving the energy rating of their properties. But while policies shift, climate change is going nowhere, and energy-efficient buildings will remain central to net zero plans. Rules might not be changing as soon as 2025, but professional landlords with modern, energy-efficient stock will be in the best position to attract tenants, as well as reduce potential voids, and importantly, be prepared for future legislative change.”
Further analysis of the survey data revealed that nearly half (46%) of landlords had invested between £500 and £20,000 in property improvements over the past year, with the mean average amount spent being £25,148. This average increased significantly to £37,164 for landlords based in London, where property values and energy efficiency concerns tend to be higher.
Looking ahead, one-fifth (20%) of respondents identified the cost of labour for property improvements as a primary concern for their rental properties in the next six months. Additionally, 16% expressed concerns about EPC regulations, indicating that the issue still weighs on the minds of some landlords despite its cancellation. The proposed regulations had also influenced many landlords to adopt a more energy-conscious approach when considering new property investments, with over a quarter (28%) planning to prioritize newer, more energy-efficient properties in their upcoming purchases.
In response to rumours about the initial EPC regulation deadline potentially moving to 2028, 31% of landlords believed that the extension would provide them with more breathing space to complete improvements across their property portfolios. However, an almost equal proportion (29%) remained committed to progressing with their improvement plans regardless of any deadline shifts.
While the UK government’s decision to scrap the EPC regulations may have temporarily alleviated some financial burdens on landlords, it appears that a substantial portion of the rental property market remains dedicated to enhancing energy efficiency, recognizing the long-term benefits of such investments.