A warning has been issued that lettings agencies could lose millions of pounds if landlords quit over new EPC targets.
Reapit analysed some 52,000 private rental properties in England, Scotland and Wales and claims that as a result of the Labour government’s energy efficiency targets 880,000 current rental properties could be lost to the sector if landlords quit rather than upgrade to an EPC rating C or above.
The PropTech firm calculates 2.7m rental properties across Great Britain will need to be retrofitted with some form of energy efficiency measure, to hit new targets by 2030.
However, if landlords of 800,000 properties instead choose to sell with an EPC rating of E, F, or G, the sector could lose over 17% of its current stock.
The cost of retrofitting all PRS properties in England, Wales and Scotland rated below an EPC C rating to a C is estimated at £24.03 billion.
The average cost of retrofitting per landlord is £10,442, but upgrade costs will not be shared equally across all landlords as some will have older and less energy-efficient stock than others.
Reapit says that at worst, the retrofitting costs per property for those with an EPC rating E, F and G could exceed £14,000 per property, based on costs estimated in the latest English Housing Survey, adjusted for inflation.
The company says what government support exists in the form of interest-free loans and grants should be reviewed and improved. Mortgage lenders should also be encouraged to provide discounts for energy-efficient homes and favourably adjust mortgage rates if a landlord is taking equity out of a property to fund energy efficiency upgrades.
If this isn’t forthcoming and 17% of current stock is lost to the sector, agents could in turn lose over £229m in fully managed and let-only fees a year.
The new EPC target was confirmed by Energy Secretary Ed Miliband last month a similar policy was put forward by the previous Tory government but dropped in 2023.
“Our report reveals the sheer scale of the work ahead. While we all recognise the need to address the greenhouse gas emissions from housing in the UK, this cannot come at the cost of people’s homes” says Steve Richmond, general manager UK&I at Reapit.
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So if these landlords sell, is there any obligation for the buyers to increase the EPC rating to C? If not it is a pretty pointless exercise and will just drive rents up further, as with all Govt PRS policy over the last 14 years.
This is a fuel poverty / public health issue far more than eliminating CO2 pollution to reduce the catastrophic effects of global heating. For as long as I can remember 3 million families have lived in fuel poverty during the winter months; that means that they do not turn on the heating in their home or at the most heat just one room. When the Ukraine war started gas prices shot up and now 8 million families have had that last two winters living in fuel poverty. The vast majority of these families live in PRS houses and flats. The UK's social rental sector now has one of the most energy efficient housing stocks in Europe due to social landlords investing in quality and reducing energy waste over the last 15 years. Many of the UK's 2 million domestic landlords have not made these strategic investments into improving the quality of their assets. Their investment models have been based on taking 100% of the rental income from the asset and returning nothing to the asset.
We have had the now very accurate domestic and commercial EPC national measurement system for over 16 years. David Cameron's Minimum Energy Efficiency Standard (MEES) has been with us for over 9 years. Some of us have done something about it and have steadily invested back into our units over many years.
This is nothing new - companies that do not invest in staff training/skills, automation and innovation always fail over the long term. Landlords who have failed to keep their units fit-for-purpose will fail and have to sell their units. Many will sell as a loss as mortgage companies now refuse to offer 25 year mortgages on poor quality, energy wasteful houses and flats. This is how markets works. For most of these 2 million landlords they would be far better investing their capital in the HSBC FTSE 100 Index Fund and let 100 of the vest best CEOs in the world try to make them some money. Active business ownership and management, including being a residential landlord, is no place for amateurs seeking the 'passive income'. There is no such thing as passive income - never has been and never will be.
I see Colin has been censored because he criticised Gibbo’s usual long winded diatribe. Colin are not the only person to find Gibbo a turn off. You will find him at parties, alone in the corner, unless Kim Jon Norwood is also in attendance. 🤣
I wait for my comment to be removed.😉
The truth is not wanted - free speech being censored ?????
It seems that those who cry loudest for 'free speech' are those whose anger surges when they read something that doesn't totally mirror their world view. You know what will be written in The Guardian, so don't read it if easily offended. You know what you'll get if you listen to GB News, so tune into Radio 2 if you have a blood pressure problem.
We all have a personal choice on what we read - and thank the Lord for that!
It's common sense.
Shame you lack common sense then.
Free speech is one thing, but constant repetition of the same mantra is akin to the brain washing technique used by communist states , now Great Britain
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