Introduction:
A recent survey conducted by Rightmove has revealed a significant shift in the mindset of landlords regarding their lower-rated Energy Performance Certificate (EPC) properties. The study found that one-third of landlords who own properties with lower EPC ratings now plan to sell them instead of investing in improving their energy efficiency. This figure marks a sharp rise compared to the 20% who expressed such intentions just last year. In addition, the survey highlighted an increasing reluctance among landlords to purchase properties below a C rating, with nearly two-thirds (61%) now preferring to avoid such investments, a significant rise from the 47% recorded last year. These findings shed light on the changing landscape of the rental market and the motivations of landlords with different-sized portfolios.
Attitudes Vary Based on Portfolio Size:
The survey conducted by Rightmove also revealed divergent attitudes towards EPCs and future portfolio plans among landlords, depending on the number of properties they own. Landlords with larger portfolios, those who own five or more properties, displayed a higher likelihood (27%) of expanding their portfolios over the next 12 months compared to those who only own a single property (10%). Moreover, landlords with larger portfolios are more inclined to invest in improving properties with EPC ratings below a C before 2025 and are also more willing to purchase properties with lower EPC ratings compared to their counterparts who own only one property.
Rising Awareness and Legislative Impact:
The survey’s results also indicate that landlords are increasingly aware of the proposed changes to EPC legislation, which likely influenced their decision-making process. The study found that 80% of landlords are now familiar with the new energy efficiency legislation, a significant increase from the 65% reported in 2022. This heightened awareness suggests that landlords are proactively adjusting their investment strategies to align with the anticipated legislative changes.
Expert Insight:
Commenting on the survey findings, Tim Bannister, Rightmove’s property expert, emphasized the growing concern among landlords regarding upcoming changes to EPC legislation. He highlighted that while some landlords opt to sell their properties, those with larger portfolios are more likely to invest in necessary improvements to enhance the EPC rating of their lower-rated homes. Moreover, these landlords are also willing to purchase properties with lower EPC ratings, potentially aiming to improve them for future rental opportunities. Bannister suggests that this shift in attitude may result in a changing of the guard in the rental market, as landlords with larger portfolios acquire lower-rated properties from those with smaller portfolios, improving them for future rental prospects.
Conclusion:
The Rightmove survey has brought to light the changing landscape of the rental market and the evolving attitudes of landlords towards EPC ratings. With a notable increase in the proportion of landlords planning to sell their lower-rated properties instead of making energy efficiency improvements, the market dynamics are set to shift. However, landlords with larger portfolios are taking a different approach, actively investing in lower-rated properties and making the necessary improvements to meet future standards. As awareness of proposed EPC legislation grows, landlords across the board are adapting their strategies to remain compliant and competitive in an increasingly energy-conscious rental market.