As more landlords offer ‘bills included’ rentals, EPC improvements could help them boost profit margins, it’s being argued.
The latest research from energy efficiency platform epIMS claims that with more landlords opting to offer bills included within their asking rent expectations, boosting their EPC rating could improve profit margins.
Its analysis of current rental listings shows that 14% of properties on the market offer the cost of bills included within monthly asking rent.
This has increased by 57% in the last year alone.
epIMS analysed the current average energy bill for each property type based on its EPC rating and how the cost required to power a rental property differs based on its energy efficiency.
The figures show that the average property with EPC D rating has an average energy bill of £2,513. By upgrading to a C, it would reduce this cost by 29% or £717 per year.
Upgrading from an E rating to a C would cut the average energy bill of a property by 48% or £1,685 per year.
The average landlord with a F rated property could reduce the average energy bill by 61% or £2,838 per year.
For those with the worst rated EPC rating of G, improving their property to just a C rating would see them save a huge £4,240 per year, cutting their energy bill by 70%. That’s a potential saving of over £21,000 over the next five years.
The chief operating officer of epIMS, Craig Cooper, comments: “Landlords have been hit by a string of legislative changes designed to dent the profit margins of their buy-to-let portfolio, not least the recent hike to second home stamp duty costs, so they can be forgiven for viewing the mandatory EPC C rating as yet another layer of unnecessary red tape to adhere to by 2030.
“However, with more and more landlords offering the cost of bills included within their asking rents, making EPC improvements now could see them boost their profit margins, as they could dramatically reduce the energy costs associated with their property.”