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Should EPC initiatives in rental homes be a focus for politicians?

Last autumn, Rishi Sunak scrapped plans to bring in tougher minimum energy performance certificate (EPC) ratings on rental homes, but does it need a rethink?

Until the prime minister swept aside plans to bring up the minimum energy efficiency standards of homes in the private rented sector, large numbers of landlords had been making plans to upgrade their properties to meet the new requirements.

Rental properties were going to need to achieve an EPC rating of C or higher in order to be able to be legally let, or else landlords would have to prove that they had spent a certain amount of money in a bid to reach this level.

The idea behind the scheme was to improve standards for tenants, reducing energy bills and also giving them a better place to live, while also contributing towards the UK hitting its net zero targets. The UK’s buildings produce a huge proportion of the country’s total carbon emissions, so upgrading rental homes was aimed at reducing this.

While many landlords were pleased that they would not be forced to spend money upgrading properties that were rated at D to G on their EPCs, others had already made a start on upgrading their rental properties, or even completed them. Some had even sold their energy inefficient homes, reinvesting in better-rated properties.

Rightmove urges politicians to rethink EPCs

Property portal Rightmove has revealed its wish list for the politicians vying for power in the upcoming general election on 4th July. This includes speeding up housebuilding and the house-buying process, increasing first-time buyer support, reforming stamp duty, and offering incentives for greener homes.

In a survey it put out earlier this year, Rightmove found that green incentives were the third most requested change of the next government from homeowners.

In the rental sector, tenants listed legislation for landlords to upgrade homes in their top five list of priorities.

It writes: “Home-owners also need better and easier access to schemes that enable them to make green improvements, with the recognition that each home requires different improvements, and that currently the upfront costs are a big barrier to change.”

Rightmove believes financial incentives should be provided to landlords to improve the energy efficiency ratings of their rental properties – with tenants increasingly wanting to live in more energy-efficient homes.

At the moment, it is believed that the pre-existing minimum EPC rating for rental homes of ‘E’ still stands, although there have been reports that this is not being enforced by councils.

Landlords still making green changes

Despite the current government’s U-turn on EPC initiatives, a recent study by Finbri revealed that more than 70% of landlords (in a survey of 755 across the UK) plan to carry out improvements to improve their energy efficiency ratings on their rental properties this year.

This is up from 68% in last year’s survey, despite the fact there is no longer a government push to do so, and demonstrates how the importance of future-proofing a property for rent is growing. As Rightmove pointed out, tenants are more likely to prioritise EPCs, which is why landlords are doing so, too.

More than three quarters (77%) of landlords said that EPC ratings were important when looking for investment properties, while 70% believed that the ratings were important to their tenants.

Dedicated to improving properties

Georgia Galloway, from Finbri, said: “Our survey found that landlords continue improving their properties to improve EPC standards despite the delay in proposed regulations.

“With 60% of landlords having already completed EPC improvements in 2023, it’s evident that they are further undertaking energy-efficient investments.

“This underscores their dedication to improving their rental properties and/or preemptively mitigating the potential impact of government changes.”

Investing in a new-build property is an increasingly popular way of ensuring a future-proof home, whether to live in or as a rental option, as they come with the highest energy performance credentials, and sometimes with energy efficient appliances.

To find out more about investing in a new-build, and saving money by buying off-plan, get in touch with BuyAssociation today, or browse some of our current projects

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