Time for action? Two-thirds of rental homes not green enough

Time for action? Two-thirds of rental homes not green enough


Todays other news
House prices rising sustainably (at least until the Budget…)...
Land close to Lake District with plans for 32 homes...
Unusual commercial lots under the hammer next week...
Methodist church ministers’ houses under the hammer at auction...


With energy bills due to increase by 54% next month, research from specialist property lending experts Octane Capital has revealed that just a third of rental properties currently have an energy performance certificate (EPC) rating of C or above.

While an EPC has been a legal requirement for all homes since 2007, the government has set a target to ensure that all properties within the private rental market have a minimum EPC rating of C or above by 2028. 

Part of this includes the Minimum Energy Performance of Buildings (No. 2) Bill, which reached its second reading in the House of Commons last Friday (March 18) and aims to legally increase the minimum level of energy efficiency to a C.

While this is good news for future tenants, just 33% of current properties in the private rental sector across England and Wales currently boast an EPC rating of C or above. That’s just 1.6 million homes out of a total of 5 million. 

It’s also estimated that the cost of bringing these rental homes up to a C rating sits at a minimum of £7,646 per property, with the total cost of improving PRS energy efficiency hitting £25.7 billion.

Interestingly, London is home to the most energy-efficient private rental market in England and Wales. Some 41% of the capital’s rental properties have an EPC rating of C or above, equating to 424,460 homes. 

However, the sheer size of the London rental market means that the remaining 59% would also require the largest budget to bring them up to standard – totalling £4.7 billion. 

The South East (240,573), North West (190,154), South West (179,212) and East of England (174,949) also offer some of the highest volumes of energy-efficient rental properties.

At the other end of the table, Wales (62,122), the North East (65,033) and East Midlands (125,039) are home to some of the lowest stock levels of rental homes with a rating of C or higher. 

Jonathan Samuels, chief executive officer of Octane Capital, comments: “It’s currently a legal requirement that rental properties have both an EPC and a minimum rating of E. However, the government’s new aim is to increase this to a C rating by 2028 and around two thirds of current PRS stock sits below this threshold.”

“This means that many tenants will already be paying considerably higher energy bills than they would in a more energy efficient home and this cost is set to climb significantly higher this year.”

While the government has committed to ensuring new rental homes meet a minimum standard, Samuel’s says they shoulder some of the blame where existing rental properties are concerned.

He explains: “The cost to improve a property’s rating to a C is substantial and many landlords simply don’t have the financial resources to do so, having seen the profitability of their portfolio dwindle thanks to legislative changes to tax relief and an increase in stamp duty when purchasing a buy-to-let home.”

“It’s yet another example of how the government’s campaign against landlords has been inadvertently detrimental to tenants and why we should be encouraging buy-to-let investment in order to raise standards across the sector.”

Share this article ...

Join the conversation: Login and have your say

Subscribe to comments
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Recommended for you
Related Articles
House prices rising sustainably (at least until the Budget…)...
Five innovations to ‘solve’ the UK’s housing crisis, says Barclays...
Investors enjoying capital appreciation as housing market rises...
How should buyers judge the price of a property on...
The financial success of your buy-to-let depends on the investment...
The new Labour government has finished the job started by...
Manchester is the highest-ranking English city for residential investment, according...
Recommended for you
Latest Features
House prices rising sustainably (at least until the Budget…)...
Land close to Lake District with plans for 32 homes...
Sponsored Content
In the ever-evolving landscape of property investment, staying ahead of...
Property investors, This one's for you. Lendlord's latest Deal Analyser...
The savvy property investor knows the importance of adapting their...
0
Would love your thoughts, please comment.x
()
x

Send to a friend

In order to send this article to a friend you must first login. Click on the button below to login or sign up.

No one likes pop-ups ...
But while you're here