A quarter (25%) of landlords have stated that new energy efficiency requirements for rental properties are already influencing their buying decisions, Paragon Bank has found.

Paragon’s research of 1,200 landlords found that 15% have purchased property with an Energy Performance Certificate (EPC) rating of between A and C in anticipation of the new requirements, with a further 10% buying a D-rated property with the view to upgrading.

New Government proposals state that new rental tenancies will require a minimum EPC of C by April 2025, with all tenancies meeting that standard by 2028. Just under six in 10 (59%) of landlords have taken some form of action as a result of the proposed implementation.

However, it is over two years since the proposals were made by Michael Gove, secretary of state for levelling up, housing and communities, and he has recently hinted that the implementation may be delayed.

In addition to acquiring A-C rated properties, 19% of landlords have already made improvements to bring a property’s EPC rating to C or above. The study found that 14% have also indicated they are in the process of retrofitting their properties with energy-saving measures in order to increase their EPC rating to C or above.

Paragon’s research also found that 9% of landlords have sold property that would be too expensive to upgrade to the proposed standards, with 7% selling homes that are unable to reach EPC C or above.

When asked on how EPC ratings are influencing future property purchase decisions, six in 10 (61%) said that they would target properties that all into A-C ratings, with 18% targeting properties with D-E ratings wit the intention of upgrading them. Just 2% said they would purchase properties with ratings of F-G, the lowest efficiency rating. The remaining 19% said that EPC rating would not impact their future decision making.

Commercial director at Paragon Bank, Louisa Sedgwick, said: “Gove’s recent comments mean it’s looking increasingly likely that any new private rental sector energy efficiency standards will be delayed. Nevertheless, it’s encouraging to see landlords are already building on the progress made over the last decade in making privately rented homes more sustainable.

“Most commonly, this has been through buying homes that already meet the new standards proposed by the Government, incentivised by green mortgage products. But, with a significant proportion of landlords already making upgrades to improve the energy efficiency of the properties they already own, or planning to do so in future, we see a need for financial support as well as education on what can be a complex and costly undertaking, something that presents huge opportunities for the sector.”

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